UNDP Alternative Financing Lab as a response to the new ‘age of choice’ for the development finance

Have you heard about UNDP Alternative Financing Lab (AFL) responding to the new ‘age of choice’ for the development finance? And did you know that the very first investor in this AFL-Lab was the Ministry of Finance of Slovak republic?

Ten months ago an eclectic group of people introduced new financial mechanisms – blockchain based cash transfers and impact bonds for reducing recidivism to forecast based finance for disasters and peer to peer lending for SMEs emerging into what the ODI calls a new ‘age of choice’ for the development finance. As a response to this news an Alternative Finance Lab has been set up in Istabul.

There is a $2.5 billion gap in funding the current SDGs agenda (even though ODA flows to developing countries continue to increase year on year), therefore AFL is trying to tackle this issue. But AFL is also tickled by the sheer explosion of money coming from other sources of funding that aren’t high on the priority list of either development organizations or governments: the European alternative finance market grew by 144% in 2015, the global impact investment market is projected to grow over $3 trillion in the coming years, and crowdfunding investments reached $37 billion in 2015 (it is about ⅓ of total ODA totaling $131 billion in 2015).

Several inspiring cooperations are going on already in Moldova, Ukraine, Serbia, Georgia, Belarus and other countries (mostly in Europe and CIS region). Read more about the topics: Blockchain and development; Preventative finance (social impact bonds and forecast based finance); Crowdfunding in development and other AFL steps in UNDP blog.