UN Capital Development Fund (UNCDF)
1. Since the adoption of the 2030 Agenda and the SDGs, has the governing body of your organization taken (or will it take) any decisions or new strategies to guide the implementation of the 2030 Agenda and the SDGs? If any, please provide a brief summary below, including the overarching vision of your organization.
Following a year of extensive consultations with its Executive Board members and observers, UNCDF has submitted its Strategic Framework, 2018-2021, to the UNDP Executive Board for review at its January 2018 session. The Strategic Framework is aligned with the 2030 Agenda, primarily focusing on sustainable development goals 1, on poverty eradication, and 17, on the means of implementation. UNCDF contributes to other goals by identifying targets where local finance solutions can overcome entrenched obstacles to progress. The Strategic Framework also responds to the Addis Ababa Action Agenda; the Paris Agreement on climate change; and the New Urban Agenda.
2.1 SDG-specific strategies, plans or work programmes
UNCDF has articulated its new Strategic Framework covering 2018-2021. It is aligned with the 2030 Agenda, primarily focusing on sustainable development goals 1, on poverty eradication, and 17, on the means of implementation. UNCDF contributes to other goals by identifying targets where local finance solutions can overcome entrenched obstacles to progress. At the programme level, all new programmes will be aligned with at least one or more SDGs.
2.2 Aligning the structure of the organization with the transformative features of the 2030 Agenda, including any challenges and lessons learned in doing so
UNCDF has coded all of its programmes to the SDGs and is working to ensure integrated responses to the specific SDGs and targets to which it contributes. That said, the interconnected nature of the SDGs, especially at the target level, can make it challenging to identify one-to-one SDG linkages at the programme and activities levels..
2.3 Readjusting or updating results-based budgeting and management, including performance indicators:
UNCDF's new Integrated Results and Resources Matrix, which is annexed to the new Strategic Framework and runs concurrently with it, as well as the accompanying Theory of Change, are aligned with the SDGs. Together, they articulate how UNCDF's programmes and interventions will support SDG achievement and also provide the tools to monitor, measure, and report on progress.
2.4 Action to enhance support to the principle of "leaving no one behind" and to integrated policy approaches:
UNCDF's Strategic Framework and its programmes are designed to focus on the 'last mile' in LDCs, which refers to the localities, men and women; small and medium-sized enterprises; and local governments that are underserved and excluded; where development needs are greatest; and where finance flows are most scarce. The Theory of Change annexed to the new Strategic Framework details UNCDF's approach on how it plans to target the poor and vulnerable populations to reach the last mile.
3.1 Mainstreaming the SDGs in development plans and policies or through national sustainable development plans/strategies:
As active contributors to the work of UNCTs where it is present, UNCDF supports broader UN efforts at the policy, analytical, and capacity building levels to ensure that SDGs - especially those SDGs and targets to which it contributes - are reflected in national development plans.
3.2 Mainstreaming the SDGs in sectoral strategies, including specific SDG/target strategies:
In those sectors where it works, UNCDF provides policy, analytical, and capacity building levels to ensure that SDGs and targets relate to its work on local development finance and financial inclusion are reflected in sectoral strategies.
3.3 Data and statistical capacity building:
UNCDF uses data, diagnostics, and analyses to identify 'pain points' and unmet needs where the lack of access to finance holds back development. Specifically, through its data and analysis, demonstration effects, and advocacy, UNCDF supports policy change that leads to improved local government financing systems and legislation. In addition, UNCDF has developed data-driven diagnostics that reveal markets and trends, and empower governments to define financial inclusion strategies tailored to their circumstances and needs. These tools create strong national platforms for donor coordination and private sector engagement. UNCDF will continue to deploy such approaches, building capacities and reinforcing coordination among stakeholders, especially regulators and financial service providers.
3.4 Science, technology and innovation for the SDGs:
After identifying unmet needs where the lack of access to finance holds back development, UNCDF provides a mix of technical assistance and capital instruments to help its partners design and test innovations in response. Through its demonstration effect, UNCDF prepares the ground for public and private stakeholders to replicate and scale up viable models. In financial inclusion, digital innovations have revolutionized the way financial services are provided and used, and have created new business models to expand access to basic goods and services. Leveraging this digital revolution, UNCDF seeks to address a growing range of 'real economy' challenges linked to the sustainable development goals, such as improving agriculture productivity for smallholder farmers and value chain actors, enabling access to clean energy and other basic services, or supporting micro-, small and medium-sized enterprise growth, including in such sectors such as the 'fintech' industry. These interventions especially target women and youth. UNCDF also uses its capital tools and technical assistance to incentivize financial services providers to design and deliver client-centric product innovations using alternative delivery channels - such as rural agents, mobile phones, point-of-sales devices, and informal community groups - to reach underserved populations, especially women, youth, and smallholder farmers. UNCDF support to financial service providers and other partners seeks a demonstration impact that will help other service providers to replicate successful innovations. By creating safe spaces for piloting smart products and delivery channels - such as the innovation labs in Uganda and the Pacific - UNCDF helps unlock the balance sheets of large commercial actors to reach the un-and under-banked with new services. In local development finance, UNCDF collaborates with governments and other partners, often through multiple generations of innovations, first to create viable models and then to help them scale approaches to fiscal decentralization, project finance, and municipal finance. This can lead to increased local revenue through taxes and fees - as well as second-round effects through growing local economies - as can UNCDF work building the capacities of local authorities to improve the accountability of their tax administration.
3.5 Multi-stakeholder partnerships:
UNCDF works with UNDP and other United Nations entities to introduce more integrated approaches to making finance work for inclusion. UNCDF collaborates with other entities where the combination of its capital tools and expertise and the sector or thematic knowledge of other organizations can help tackle last-mile exclusions and have transformative impact.
With regards IFIs, UNCDF will continue to engage with these partners to maximize replication and scale potential, including collaborating with regional banks on market development in financial inclusion and ecosystems for digital payments. UNCDF will seek to partner strategically with international financial institutions in deploying financial instruments in ways that harness the respective collaborative advantages of each entity in support of least developed countries.
UNCDF works with a wide range of private sector actors as innovators, implementing partners, and possibly funders. This includes investing and partnering with financial service providers; mobile network operators; domestic banks; pension funds; small and medium-sized enterprises; foundations; and impact and other investors to expand the reach of finance in local economies.
3.6 Sub-national plans/strategies and implementation for the SDGs:
A core part of UNCDF is premised on the fact that while the 2030 Agenda is global, it will be ultimately implemented at the local level with the participation of local governments and local stakeholders. In its local development finance work, UNCDF focuses on innovating finance models that bring localities and excluded populations into the development mainstream. In supporting least developed countries to build inclusive, resilient economies, UNCDF adopts a transformative-impact financing approach to promote service delivery, infrastructure investment, and local economic development that retains value within a local territory. UNCDF seed capital and technical assistance will focus on helping localities build local fiscal space and local fixed capital formation.
Working with local governments, domestic banks, and local businesses, UNCDF provides evidence-based in-country analysis that informs the local development processes in the fields of fiscal decentralization, local public finance, and own resource revenues.
To create the demonstration effects needed to support wider shifts in sustainable development goals financing, UNCDF helps least developed countries design and pilot financing mechanisms and business models that support locally designed public investments and revenue-generating capital investment projects. These are applied to addressing specific development bottlenecks.
In 2017, UNCDF and UN-DESA/Financing for Development Office published a "Financing for Sustainable Urban Development in the Least Developed Countries". The publication is designed to promote knowledge sharing amongst stakeholders in urban finance and local sustainable development. Its prime objective is to support government officials in least developed countries at the local and national levels to strengthen their urban finance frameworks.
3.7 Leveraging interlinkages across SDG goals and targets:
Through its work on finance solutions, many UNCDF programmes by design impact on a number of SDGs. For instance, investments in feeder roads can free people's time for more productive purposes, get goods to market faster, and improve access to basic services. Similarly, access to savings and insurance can protect families against loss, out-of-pocket medical expenses, and free them to make educational and entrepreneurial investments to transition out of poverty.
4.2 Contributing to policy/background briefs for the HLPF:
UNCDF has contributed to a number of inter-agency processes which have prepared background papers for the HLPF.
4.3 Helping organize SDG-specific events in the preparatory process:
UNCDF has organized a number of events in the run up to the HLPF on a number of different SDGs, always with an angle on how access to finance can move the needle.
4.4 Organizing side evens or speaking at the HLPF:
UNCDF has organized and taken part in a number of side events at the HLPF, specifically around financial inclusion and municipal finance.
4.5 Supporting VNR process:
UNCDF has recently developed internal guidance to support national VNR processes. As part of the Ethiopia UNCT, UNCDF has also provided financial support to the National Planning Commission in the preparation of first Ethiopia National Voluntary Report on the SDGs to the High Level Political Forum.
5. How has your organization cooperated with other UN system organizations to achieve coherence and synergies in the implementation of the 2030 Agenda and the SDGs? In this regard, has your organization launched or intend to launch any joint programmes or projects in collaboration with other UN entities? Are there any results or lessons you would like to highlight that might help improve the design and impact of such efforts? Has your organization participated in any of the following coordination systemwide mechanisms or any other relevant platform - CEB, UNDG, EC-ESA Plus, RCMs, UN-Energy, UN-Water, UN-Ocean, IAEG, IATT? Please specify which and indicate any suggestions you may have about improving collaborations within and across these mechanisms/platforms:
The synergies between UNDP and UNCDF are designed to bring maximum benefit to least developed countries. UNCDF local finance solutions and subnational focus are a natural counterpart to the UNDP global presence, upstream policy advice, and support for the sustainable development goals at the country level. Both entities share the overarching objective of eradicating poverty and reducing inequalities and exclusions. At the programmatic level, UNCDF has nearly 20 joint programmes with UNDP.
In addition, UNCDF collaborates with other entities where the combination of its capital tools and expertise and the sector or thematic knowledge of other organizations can help tackle last-mile exclusions and have transformative impact. Partnerships underway and being planned include:
(a) UNDP and UN-Women, on unlocking capital for women's economic empowerment and entrepreneurship;
(b) UNDP to expand financial inclusion in the Pacific;
(c) The Food and Agriculture Organization, on agriculture finance;
(d) The International Fund for Agricultural Development, on remittances;
(e) UN-Habitat and the Department of Economic and Social Affairs, on municipal finance in secondary cities in least developed countries;
(f) UN-Women, on women and girls' access to, usage of, and control of benefits from financial services; and
(g) UNHCR on a technical assistance fund for introducing digital financial solutions that benefit forcibly displaced populations and host communities.
UNCDF contributes actively to a number of UNDG working groups, especially those on sustainable development/sustaining peace and strategic financing. UNCDF also takes part in ECESA+ meetings; OHRLLS working groups on LDCs; and is an active contributor to the FFD IATF led by DESA.
6. How has your organization engaged with stakeholder groups, both in supporting implementation at the country, regional and global levels, and within your own organization? If yes, please provide main highlights, including any lessons learned:
UNCDF engages with a wide range of partners, public and private, including other UN entities, in its work at the global, regional, and country levels. At the global level, for example, UNCDF is partnering with peer networks (CGAP, UCLG, Cities Alliance etc) and impact investment firms to create vehicles for directing sustainable development goal-positive finance to LDCs. At the regional level, UNCDF helps regional groups such as the Association of Southeast Asian Nations, the Southern African Development Community, the West African Economic and Monetary Union, and the Pacific Small Island Developing States to expand the reach of financial inclusion, including through multi-country approaches to remittances, data and analytics, refugees. At the national level, UNCDF works with government entities as well as private sector partners such as mobile network operators and SMEs to make finance work for the poor. Lessons include that well-designed partnerships can take advantage of the unique skills and technologies that different entities can bring to the table, bringing maximum benefit to poor households. For example, through working with mobile network operators, UNCDF is able to leverage technological innovations, such as digital delivery channels, to reach increased numbers of low-income clients, expanding, for example, their access to affordable clean energy or formal savings products.
7. Has your organization organized any conferences, forums or events designed to facilitate exchange of experience, peer and mutual learning? If yes, please provide a brief summary below and include lessons learned and gaps identified based on the outcomes of these events. Please also include any events you plan to organize in the coming years.
UNCDF has organized and continues to organize a large number of events at the HQ, regional, and country levels to support peer learning, South-South exchanges, and lessons sharing with funding and implementing partners. These conference and events relate to UNCDF''s practical experience in making finance work for the poor, and will continue in the years ahead, with a strong focus on digital finance, municipal finance, and the application of blended finance in LDCs.
8. Is there any other information you would like to share, including annual reports of your organization and any impact assessment or evaluation reports? If yes, please use the space below and attach the document(s). Please also use this space to provide any other information, comments or remarks you deem necessary:
Here is the link to UNCDF's 2016 annual report:
9. In your view, what should a strategic plan for the UN system in support of the 2030 Agenda and SDGs look like? What key elements should it include and major challenges address in such a road map?
First, the UN development system must be able to identify through such a plan where and how it will contribute to which SDGs and, where there are gaps in the UN's capacities and abilities to deliver, how it will work/partner with other public and private entities to ensure those gaps are filled.
Second, it is crucial for such a plan to have a strong focus on supporting developing countries to be able to finance SDG achievement. The UN has a critical role to play through its leadership, normative and convening roles; its innovation and knowledge sharing; and its relationship of trust with governments to identify and address gaps so that financing works for inclusion. It is mission critical for the UN system not only to accompany the move from "billions to trillions", but to help unlock those trillions.The UN can also help governments coordinate, track, allocate, and account for these sources of financing so that they are working together effectively to meet the SDGs; to tap those sources that may not be productively working toward positive SDG achievement (e.g., excess liquidity in domestic banks, domestic pension funds); and to redirect (through concessional finance and other innovation approaches) financial flows for greater transformational impact. This means the UN itself needs the right financing skills and expertise to be able to accompany greater flows of finance into investments that are SDG-positive. To this end, the UN should draw on existing finance capacities and experiences within the UNDS.
The UNDS does not have the volume and capacity to drive the needed funding to financing changes 32 times over, nor should it. While individual agencies will continue to pursue relevant innovations on their own, the common system needs to organize itself to implement the shift recommended in this paper at scale.
10. Please indicate one or two endeavor or initiatives you suggest that the UN system organizations could undertake together to support the implementation of the SDGs between now and 2030:
Convene and drive development of de-risking instruments to catalyze private flows into under-capitalized SDG-related sectors, subnational regions, and also in support of promoting access to essential technology.
Explore innovative sourcing of finance, including through a voluntary SDG tax, attracting voluntary contributions from listed corporations, and issuing bonds.