NEWS
BY Serena Stepanovic
March 25, 2025
The growing frequency and severity of shocks and stressors—from natural disasters, diseases, political and economic fragility, and other causes—are increasingly undermining the livelihoods, health, and safety of the poor. More and more people need support, but efforts to provide it are often fractured. As international development practitioners and policymakers, we need to pursue a more holistic approach to building the resilience of the poor and vulnerable.
Traditionally, sustainable development interventions were designed to promote specific resilience capacities (absorptive, adaptive, anticipatory), based on the nature and severity of the vulnerabilities to risk present during a given stressor or shock. For example, savings can assist households in maintaining stable consumption after a temporary, low-intensity shock. However, for more severe and prolonged events, such as extended droughts, precautionary savings may not be sufficient. In such cases, a combination of insurance and credit may be necessary to help households cope with the impacts of the drought and invest in more resilient livelihoods.
In 2024, World Vision and its partners advanced a new framework that seeks to achieve holistic resilience. This approach—which looks at resilience as a multidimensional phenomenon that includes elements of the process, mindset, and capacity that individuals, households, and communities deploy in dealing with shocks—is useful for designing programs across the humanitarian development and peace nexus.
Financial inclusion is critical to sustaining the resilience of families and communities, as a recent review of programming across sectors and systems shows. It can be supported through traditional safety net programs as well as efforts to leverage cash transfers by linking them to livelihood interventions such as multifaceted economic inclusion programs.
Both interventions focused on facilitating access to financial services and multifaceted economic inclusion programs help poor and vulnerable people enhance their ability to withstand and adapt to various shocks (El-Zoghbi, Holle, and Soursourian 2019; Moore and others 2019; World Bank 2023; Andrews and others 2021). Of course, the effectiveness of these programs depends on how they are designed and implemented.
Savings groups, informal or semi-formal member-based financial structure that provides members with a platform for saving and borrowing, are often used to increase financial inclusion. They leverage social capital to foster social cohesion while creating a pathway for financial inclusion among the most marginalized individuals. Combining savings groups with consumption-smoothing interventions (such as cash transfers) reduces negative coping strategies, such as skipping meals (Diwakar, Stepanovic, and Gilligan 2024). Over the long term, however, savings groups create greater resilience when they are tied to more holistic engagement that includes additional financial services and products. Integrating financial and digital literacy, access to credit and insurance, digital financial inclusion, and access to financial service providers into savings groups methodologies increases the resilience of the very poor in ways that earlier efforts did not (Cai and others 2023; El-Zoghbi, Holle, and Soursourian 2019; Moore and others 2019). By equipping the poorest clients with multiple resources for offsetting risks building their capacity to earn money (often from agriculturally based activities), these efforts push people farther along the pathway toward a sustainable rise out of poverty.
Photo Caption: A savings group meeting in Malawi
Photo Credit: World Vision/Chris Huber
World Vision’s organizational approach to financial inclusion integrates interventions within locally led systems (particularly agrifood and social protection systems). It crafts adaptable process solutions that account for dynamic shifts within an operating environment, harnessing local agency and working closely with local actors to identify what works best for addressing local financial vulnerabilities.
The results have been impressive:
- In Bangladesh, the Nobo Jatra project provided more than 850,000 ultra-poor clients with a continuum of services, using a graduation model. In the first cohort alone, all participating households were able to regularly save, and 42 percent sustainably increased their incomes.
- In 11 countries in Latin America, Africa, and Asia, the THRIVE program created an agrifood systems–based mechanism that allowed 10 million people to climb the economic ladder through savings, psychosocial support, market system and value chain development, and access to credit. In Zambia, research showed that THRIVE’s psychosocial interventions fostered increased hope, aspirations, identity, and self-esteem, all of which are associated with the rise out of poverty.
- In Cambodia, efforts to transform the agri-finance ecosystem of the aquaculture industry lead to a huge increase in inclusive lending. The results were extraordinary. The increase in lending allowed small and medium-size enterprises (60 percent of them owned by women) to grow, which lead to larger market shares and higher profits. While these enterprises have been considered too large for microfinance institutions and too small or risky for traditional banks or private equity, microfinance mechanisms that serviced this “missing middle” boosted industry-wide innovation and growth. The program was so successful that four institutions stepped in to provide new or redesigned lending programs to continue inclusive lending after the program ended.
Our forthcoming paper “Financial Pathways toward Greater Resilience and Economic Inclusion”—written by the World Vision, the World Bank’s Partnership for Economic Inclusion (PEI), the Chronic Poverty Action Network (CPAN), and the International Food Policy Research Institute (IFPRI)—looks at the lessons learned in recent years about how to make financial inclusion work for the poorest and most vulnerable participants. It documents how financial inclusion strengthens resilience and they ways in which institutions can support it.
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References
Andrews, Colin, Aude de Montesquiou, Inés Arévalo-Sánchez, Puja Vasudeva Dutta, Boban Varghese Paul, Sadna Samaranayake, Janet Heisey, Timothy Clay, and Sarang Chaudhary. 2021. The State of Economic Inclusion Report 2021: The Potential to Scale. Washington, DC:
World Bank. https://openknowledge.worldbank.org/server/api/core/bitstreams/33e62d47- 7ba8-5d38-ae09-48f1daf3607d/content.
Cai, Jing, Muhammad Meki, Simon Quinn, Erica Field, Cynthia Kinnan, Jonathan Morduch, Jonathan de Quidt, and Farah Said. 2023. “Microfinance.” VoxDevLit 3 (2). https://voxdev. org/sites/default/files/2023-09/Microfinance_Issue_2.pdf.
Diwakar, Vidya, Serena Stepanovic, and Danial Gilligan. 2024. Financial Inclusion & Resilience across the Humanitarian, Development and Peace Nexus. https://s3.us-east 2.amazonaws.com/wvusstatic.com/evidence/docs/FSL/Resilience+Fin+Inclusion+Working+Paper.pdf.
El-Zoghbi, Mayada, Nina Holle, and Matthew Soursourian. 2019. “Emerging Evidence on Financial Inclusion: Moving from Black and White to Color.” Focus Note, Consultative Group to Assist the Poor, World Bank Group, Washington, DC. https://www.cgap.org/ sites/default/files/publications/2019_07_FocusNote_Emerging_Evidence.pdf.
Moore, Danielle, Zahra Niazi, Rebecca Rouse, and Berber Kramer. 2019. Building Resilience through Financial Inclusion: A Review of Existing Evidence and Knowledge Gaps. Financial Inclusion Program, Innovations for Poverty Action. https://www.poverty-action.org/sites/ default/files/publications/Building-Resiliencethrough-Financial-Inclusion-English.pdf.
World Bank. 2023. Financial Inclusion Lessons from World Bank Group Experience, Fiscal Years 2014–22. Washington, DC: Independent Evaluation Group. https://documents. worldbank.org/pt/publication/documents-reports/documentdetail/099305408252329233/ secbos1e6ff9a00041b4261bcdc9c154a7b.
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Serena Stepanovic is a senior leader with 27 years of experience in international development, specializing in food security, resilience, and sustainable livelihoods. Since 2018, she has provided strategic leadership for World Vision’s food security and livelihoods sector, offering technical and leadership support across 20 countries. With expertise in agriculture-nutrition linkages and rural farming communities, she has co-authored key reports on climate action and agrifood systems. Serena holds degrees from the University of Michigan, Johns Hopkins, Tufts, and an Executive MBA from Georgetown. She also serves on a food policy council and a nonprofit board in Virginia.