Making Financial Markets Work for the Poor

The refrain, "Making Markets Work" (MMW), has been taken up by governments and business schools in recent years. Donor and multilateral organizations have taken it further: markets should work "for the Poor" (4P). A small but growing literature aims to set out the principles of the MMW4P approach, and to differentiate it from previous approaches to policy.

This paper aims to deepen and extend the MMW4P approach by applying it to a specific sector (financial services) and geography (South Africa), based on the experience of the FinMark Trust program from 2002 to date. This experience gives rise to certain questions, the answers to which are central to developing the MMW approach. The questions include:

• What does it mean for a market to work for the poor?
• Is increased access to markets always a good thing?
• Is market enablement a sufficient strategy?
• How best to influence market development to become pro-poor?

Case studies from SA financial sector in the past ten years are used to provide answers to these questions.