In my interview with Judith Karl, executive secretary of the UN Capital Development Fund (UNCDF), she talked about women using UNCDF’s products in their countries to gain financial agency. Women gaining agency improves household stability and resilience, says Karl, and this change in the resource profile of the household helps women start new businesses, send girls as well as boys to school, and reduce domestic violence.
Karl took over as executive secretary in 2014. What excites her most about her work, she told me, is that it gives investors interested in making a difference the chance to generate robust returns while investing in the world’s least developed countries (LDCs). As Karl puts it, “So much of LDC development work today is about revealing new markets that firms are not seeing, then supporting the alignment of corporate boards with the conditions under which these markets can develop. This shift in perception is fundamentally a cultural and political process.”
And the partnership is successful: In 2017, the UNCDF celebrated 50 years of making public and private finance work for the poor. Last year it supported 138 financial service providers in 23 of the LDCs in achieving a net increase in deposits of $6.5 billion. UNCDF-supported products reached 4.3 million people during 2017, 53 percent of whom were women.
How UNCDF Works
Karl brings 27 years of UN development experience to her role, having begun her career in the UN Development Program (UNDP) as a program officer in Mali. Her in-depth understanding of global economies was further enhanced during the five years she helped develop rigorous frameworks to monitor the impact of UN programs in the LDCs.
She explained UNCDF’s basic investment process: New financial products are created at the country level to meet local needs. These products are piloted in LDC economies in two ways: localized investments and financial inclusion. Localized investments mobilize public and private resources at the domestic level. Financial inclusion expands opportunities for individuals, households, and small businesses to participate in the local economy.
In the four years since Karl became UNCDF’s executive secretary the fund has completed 4,673 localized investments in infrastructure, equipment, and training. It has also invested $40 million in local governments, contributing to a 76 percent average increase in local fiscal space, that is, funds available to local governments to spend. In 2017 alone, 161 investment products were piloted that generated $445 million in client savings.
Using The SDGs As A Catalyst For Innovation
According to Karl, the UN Sustainable Development Goals (SDGs) have opened the door for UNCDF to partner with private sector firms in new ways. The SDGs framework of 17 goals was adopted by 193 countries in 2015 to address global issues including poverty, gender inequality, and the need for affordable and clean energy. The SDG framework provides clear goals that are globally accepted and offer tangible ways to integrate ESG (environmental, social and governance) metrics into company business models.
“There does not need to be a tradeoff between being SDG-positive and operating in low-income environments,” emphasizes Karl. “Companies can achieve high performance and returns while embodying the values of the SDGs.”