The United Nations Capital Development Fund (UNCDF) Policy Accelerator programme is collaborating with central banks in more than 20 LDCs in Africa, Asia and the Pacific to create the conditions in which digital financial services can benefit everyone. These include Bangladesh, Mauritania, Malawi, Nepal, Sierra Leone, Solomon Islands, Timor-Leste, Uganda, among others. The Policy Accelerator team works directly with central banks to provide open and transparent technical assistance that improves the use of digital financial services, especially for the most marginalized members of society.? UNCDF provides technical assessments, capacity building, market consultation, and other services that collectively accelerate the policy design process. The collaboration in Mauritania and Sierra Leone exemplifies the Policy Accelerator’s work. Mauritania sought support to develop a licensing arrangement for non-bank financial service providers. Sierra Leone3 was developing a consumer protection regulation that required consultation with customers and broad harmonization across other legal statutes. In both cases, the Policy Accelerator worked closely with the central bank to accelerate enabling reforms.  

Importantly, the Policy Accelerator works closely with other development partners so central bank counterparts benefit from higher quality, better coordinated support. In Ethiopia4, the Policy Accelerator worked with the World Bank, Better Than Cash Alliance and H.M. Queen Máxima of the Netherlands to support the country’s Central Bank in developing several intersecting legal reforms for inclusive finance.   

The initiative contributes to SDGs 5 (Gender Equality), 10 (Reduced Inequalities) and 11 (Sustainable Cities and Communities).  It also contributes to the Istanbul Programme of Action (IPoA) Priority Areas 1 (Productive capacity), 5 (Human and social development), 7 (Mobilizing financial resources for development and capacity-building) and 8 (Good governance at all levels).   

Currently, there are several intersecting multi-year projects5 that serve as the foundation of the project portfolio of the Policy Accelerator. These are: 

• The Africa Policy Accelerator, a collaboration with the Bill and Melinda Gates Foundation, with a specific focus on the basic regulatory enablers for digital financial services (DFS) in African markets. By 2023, the Africa Policy Accelerator will have improved the regulatory environment for inclusive DFS in 14 African countries and trained over 100 regulators to prepare for future change. 
• The G7 Partnership6 for Women’s Digital Financial Inclusion in Africa, a collaboration with the G7 and the Ministry of Finance of France. By 2024, the Policy Accelerator will have facilitated gender-intentional policy reform in key francophone African countries, such as Cameroon, Gabon, and Senegal, while also developing an advisory group of women leaders7 to champion ongoing change.  
• DFS4 Resilience, a collaboration with the European Commission and the Organization of Africa, Caribbean and Pacific States (OACPS), with a focus on inclusive digital finance as COVID-19 recovery and resilience. UNCDF’s Policy Accelerator will support key policy reforms for digital transformation, tailored to the needs of women and young people, including innovative savings products and credit.  

In addition to working directly with governments, the Policy Accelerator Toolkit is available online in an interactive digital format that can be used, replicated, and adapted by policymakers to fit the needs of their market. The practical guides for each step in the policy design process help take a systematic and inclusive approach to design digital financial services regulation. This platform was initially designed as a response to COVID travel restrictions and has emerged as a critical lifeline for UNCDF’s network of technical experts. A key lesson learned is the power of such digital tools to unlock transparent and empowering technical assistance. 

Another lesson has been the universal need for innovative capacity building, specifically around consumer protection regulation. The Policy Accelerator team developed a programme with the Fletcher School at Tufts University to bring together policymakers in Egypt to co-learn about policy solutions with a focus on consumer protection. Virtual South-South exchange visits between central banks have also proven to be an effective tool for improving capacity and knowledge. The Bank of Sierra Leone and the Bank of Malaysia collaborated on a virtual visit to share their respective consumer protection supervision approaches. As a result of these engagements, Egypt has fostered stronger public sector alignment through a common vision and training experience. Meanwhile, Sierra Leone has identified concrete solutions from direct engagement with peers, and Malaysia has tested and validated its supervision models by observing its utility in a new context.