The SmartAid Index: How Effective Are You in Advancing Financial Inclusion

This brief discusses the potential of using the SmartAid Index, a tool developed by CGAP to measure whether funders are set up to support financial inclusion effectively. It is based on the simple premise that strong internal management systems lead to better projects on the ground. The index uses nine indicators to assess funder’s internal systems and provides three assessment options: self-assessment, accompanied self-assessment, and validated assessment. Main benefits of using the index include:

• Helps identify internal best practices and areas for improvement. Institutions can understand where they are strong and where they need improvement to support financial inclusion projects effectively;
• Spurs internal dialogue on improving effectiveness. Implementing the index requires collaboration across the organization and helps spark discussions among different departments that work on financial inclusion or between staff and management;
• Allows funders to compare their performance with peers. This provides opportunities for peer learning and collaboration and also helps funders track their progress over time and compare progress with that of their peers;
• Provides evidence of commitment to effectiveness. Funders who validate and publish their SmartAid results demonstrate their commitment to transparency and accountability, which sends a strong signal to partners, stakeholders, and peers.