Policy paper

2010 to 2015 government policy: economic growth in developing countries

Updated 8 May 2015

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/helping-developing-countries-economies-to-grow. Current policies can be found at the GOV.UK policies list.


Economic growth is the most important means of raising people’s incomes and reducing poverty in the developing world – it creates jobs and opportunities for poor people to support their families and build more stable futures.

Many developing countries face particular challenges that make it difficult for them to stimulate and sustain economic growth. These challenges include weak institutions, high unemployment, poor infrastructure, a lack of access to financial services and unsuitable laws and regulations.

Millions of people do not own or have formal rights to the land they live and work on. This makes it difficult to plan or save for the future. The risk of losing land and property can deter people from investing, for example in irrigation for their land. It can also make it difficult for people to borrow to fund investments.

We are aiming to provide opportunities for more than 500 million people in developing countries to lift themselves out of poverty by 2015. We aim to:

  • help more than 50 million people to access savings, credit and insurance – including 18 million women
  • help half the countries in Africa benefit from freer trade
  • secure the right to land and property for more than 6 million people – including 4.5 million women


We work with governments, investors and business in developing countries to strengthen their business environment, increase their access to international markets, improve their infrastructure and give more people access to financial services.

Helping developing countries to remove barriers to trade and investment

We help developing countries to create the right conditions for growth and investment by working with their governments to create suitable economic policies, good governance and openness to trade and investment.

Helping developing countries to improve their infrastructure

We work with developing countries to improve their transport, energy and water services and supplies.

Helping people in developing countries access financial services

We work to give poor people better access to savings, credit and insurance, including support to 18 million women to access financial services like bank accounts, savings and insurance.

Stimulating private sector investment in developing countries

We work with the CDC (the UK’s bilateral development finance institution) to stimulate responsible and long-term private investment in developing countries.

Enabling businesses to include poor people directly

We work with developing countries to create new approaches to business that generates profits with a strong developmental impact. We work with British and European businesses, providing them with the skills and knowledge to invest profitably in developing countries and deliver development benefits to the poor.

Supporting fair and ethical business operations

We encourage and incentivise responsible business practices which enable businesses to make a more positive impact through their operations in developing countries.

We will do this by supporting:

Helping developing countries benefit from global and regional trade

We work to help developing countries benefit from global and regional trade by reducing trade costs and time, opening up global market opportunities, improving working conditions and helping countries create and sustain trading links with other economic communities.

Research evidence on promoting sustainable economic development in developing countries

We generate high quality evidence on private sector and economic growth in poor countries. We work with poor countries to help them use the evidence to find effective ways to stimulate economic growth.

Providing debt relief for developing countries

We work with international organisations to provide debt relief for developing countries.

Helping developing countries to improve their provision of basic services

We work to improve private sector provision of basic services for the poorest by helping developing country governments and the private sector providers of education, health, water and sanitation.


The government’s white paper, ‘Trade and Investment for Growth’ explained DFID’s efforts to open global market opportunities to developing countries.

In a recent speech, Secretary of State Justine Greening outlined the importance of investing in economic growth in developing countries, how DFID works in new and emerging markets and the role of business in international development. The new measures announced included:

  • a Tax Capability Unit within HMRC to provide an in-house team of tax experts dedicated to working with DFID teams in developing countries where there is a high prospect of developing their tax base
  • a Commercial Law and Justice Programme that will help to identify and remove legal constraints that add to the costs and risks of doing business in partner countries and encourage reform
  • a £51 million investment in DFID’s International Growth Centre to expand its work to Burma, Malawi, Liberia and Nigeria - the International Growth Centre provides expert, independent growth policy advice direct to governments in developing countries
  • a joint work programme with the Confederation of British Industry, industry bodies and non-governmental organisations to identify barriers to working in developing countries and how the UK government can help to remove them

In 2011 DFID published ‘The Engine of Development: The private sector and prosperity for poor people’ which set out how we intended to involve the private sector more fully in reducing poverty in developing countries.

The Debt Relief (Developing Countries) Act 2010

The Debt Relief (Developing Countries) legislation means that creditors can no longer use UK Courts of Law to pursue excessive claims against highly indebted poor countries on their historic debts.

Appendix 1: helping developing countries to improve their infrastructure

This was a supporting detail page of the main policy document.

To achieve economic growth, developing countries need to improve their transport, electricity and water supplies and services.

We work with countries and regions to identify and unblock major infrastructure problems. Reliable, accessible energy, transport and communication services support increased productivity, assists trade and creates an environment in which business can flourish. Access to infrastructure enables people to take advantage of economic opportunities and access markets, jobs, information and training. More information can be found in DFID’s new Infrastructure Policy Framework which sets out 4 priority actions to increase the government’s impact.

We fund the Private Infrastructure Development Group which gets private sector investment to assist developing countries in providing infrastructure vital to boosting their economic growth, and combating poverty. We also fund World Bank infrastructure projects, the Public Private Infrastructure Advisory Facility and innovative mechanisms like the Community Led Infrastructure Finance Facility.

Green Africa Power, a new Private Infrastructure Development Group facility, has been developed jointly by DFID and DECC to overcome specific constraints to private sector investment in renewable power generation in Africa.

GAP will invest in renewable energy projects to demonstrate their viability to encourage future projects and attract private developers and investors. GAP aims to support projects that will install about 270 megawatts of renewable energy in Africa over 4 years, avoiding an estimated 2.3 million tonnes of CO2 emissions.

Appendix 2: stimulating private sector investment in developing countries

This was a supporting detail page of the main policy document.

We work to improve the business environment in poor countries by stimulating private investment in places presently shunned by commercial investors – through a revitalised CDC and through existing and new international organisations.

We encourage investments through our holdings in the International Finance Corporation (IFC). The IFC, part of the World Bank Group, is a global development institution focused exclusively on the private sector in developing countries. It works with companies and financial institutions in emerging markets to create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities

We also encourage investments through our holdings in another member of the World Bank Group, the Multilateral Investment Guarantee Agency (MIGA). MIGA provides insurance guarantees to private sector investors and lenders. MIGA’s guarantees protect investments against non-commercial risks and can help investors obtain access to funding sources with improved financial terms and conditions.

Extractive industries

Many of the countries where DFID works are rich in minerals and metals or oil and gas. These resources can help developing countries to grow, reduce poverty and manage without international aid.

DFID supports countries to identify what resources they have, and make informed decisions about how to exploit the resources for the benefit of their population.

Appendix 3: helping developing countries benefit from global and regional trade

This was a supporting detail page of the main policy document.

Trade has a direct effect on poverty: on average, an increase in trade volumes of 10% will raise incomes by 5%. Countries which miss out on the benefits of global trade miss out on opportunities to profit from international expertise, low cost raw materials and much needed technology.

There are many prospects to open up global and regional trade further to benefit developing countries. At present, Africa accounts for just 3% of global trade. African countries trade, on average, just 10% of their goods with each other, compared to 65% between European countries.

The UK is working to reduce the costs and time taken to trade in developing countries by co-operating with governments and economic communities. For example:

  • our new African Free Trade Initiative will provide technical expertise to help deal with issues that continue to hold back economic growth across the region
  • our Regional East Africa Integration and TradeMark East Africa programmes aim to reduce the average trade transport costs in East Africa by 5-10% through better border management, and agree common procedures across East African countries for transport and logistics
  • in Chirundu, a border between Zambia and Zimbabwe, DFID supported the creation of a ‘one-stop border post’ to speed up customs procedures and cut red tape - as a result, it will take 3 hours instead of 3 days to cross the border

Opening markets

We will argue for EU preference schemes and trade agreements to be reformed in ways that enhance opportunities for trade with developing countries.

The UK will continue to lobby within the G20 countries to allow the Least Developed Countries to export their goods without having to pay duties or comply with quotas. This is estimated to be worth up to $7 billion a year for Least Developed Countries’ exports.

Appendix 4: helping developing countries to remove barriers to trade and investment

This was a supporting detail page of the main policy document.

Governments need to create the right incentives for firms to invest. Private investment by both foreign and domestic firms contributes to the economic growth that is needed to reduce poverty in developing countries.

Firms’ willingness to invest depends on the business environment - the extent to which the laws, regulations and infrastructure within a country support or limit enterprising activities. Businesses need a degree of certainty and an acceptable level of risk. To achieve this, countries need:

  • a strong rule of law
  • enforceable property and land rights
  • better regulations
  • reduced trade barriers
  • proper infrastructure
  • a functioning tax system
  • increased transparency


To encourage investment, we help our partner countries to create a regulatory framework that is proportionate, effective, transparent and balanced.

In Bangladesh, for example, DFID has helped streamlined the business registration process from 35 days to 1 day and the process can now be completed online. This and other work has resulted in over 19,000 new businesses being registered in two years. Further simplifications are expected to generate $30 million in savings for business.

Rule of law

Strong, predictable and transparent commercial legal environments are critical to stimulate domestic and foreign investment in developing countries. To operate and grow, businesses need clear rules and the ability to enter into agreements and resolve disputes quickly and affordably.

In Sierra Leone, the DFID-supported Africa Investment Climate Facility (ICF) has supported the establishment of a Fast Track Commercial Court and introduction of alternative dispute resolution methods which have halved the backlog of cases. The aim is to reduce the time it takes from filing a case to judgment from 6 years to just 6 months. Similar initiatives in Rwanda, Zambia and Uganda have worked to improve case management by local courts and modernise commercial laws.

DFID is also launching a new £5 million Commercial Law and Justice Programme to support the improvement of the legal environment for business and investment in developing countries. It will also increase the transfer of world class commercial legal knowledge, skills and support, much of it based here in the UK, to where it is needed.

Property and Land Rights

Property rights are fundamental to the functioning of any market. In most of our partner countries, less than 10% of land holdings are formally surveyed and registered. Most of the land is administered by informal, customary rules and practices. DFID’s work in Rwanda is helping rightful land owners receive legally valid land title documents. The programme has already helped register 5 million plots of land onto a new land registry.

This means that a farmer now has certainty that his or her rights will be protected, and they can’t be forced off the land. This in turn means they are more likely to invest in fertiliser, or more advanced farming methods.

Market Systems

DFID has over 40 market systems development programmes. These programmes examine markets from the perspective of poor people, to understand why goods and services provided by the private sector do not always meet their needs.

By understanding and influencing the set of incentives that shape the way businesses and communities interact, this approach can make the marketplace function more efficiently – delivering improvements not just for individuals or firms, but for the wider system.

In northern Nigeria for example, DFID worked with a private fertiliser company to help them rethink the way they sold their product to smallholder farmers – moving to supplying smaller and more affordable 1kg bags of fertiliser and providing advice on its use. This project reached 170,000 poor households and created a market that will last – because farmers are increasing their yields and fertiliser producers are making profits.

Investment Facility for Utilising UK Specialist Expertise

Launched in 2012, the new Investment Facility for Utilising UK Specialist Expertise initiative aims to share specialist expertise from UK government departments to help developing countries create the conditions for economic growth.

The UK has expertise on a range of issues such as regulatory reform, competition policy and customs procedures. This UK expertise can help governments to improve their investment climate, facilitating economic growth and helping to generate the resources needed to reduce poverty.

Read the FAQ document to find out more information about the Investment Facility for Utilising UK Specialist Expertise initiative.

Appendix 5: enabling businesses to include poor people directly

This was a supporting detail page of the main policy document.

We work to create new approaches to business that recognise that businesses can have a positive impact on society in developing countries as well as achieving profits.

Through schemes like the Business Call to Action and Business Innovation Facility, we will encourage companies to adopt inclusive business models. An inclusive business is a commercially sustainable business model that benefits poor people as consumers or producers. This might involve them employing more poor people or involving more local enterprises in their supply chains.

Business Innovation Facility

We’re supporting innovation through the Business Innovation Facility - a 3-year pilot programme to give advisory support and technical expertise to businesses that work in developing countries.

Business Call to Action

DFID helped to set up the Business Call to Action which challenges companies to develop business models that offer the potential for both commercial success and development impact.

Food Retail Industry Challenge Fund

The Food Retail Industry Challenge Fund aims to get more African products onto UK supermarket shelves. It provides grants to UK retailers and businesses who want to develop and test new ways of growing and sustaining the market for African food exports, by involving poor smallholders and farm workers, with the goal of reducing poverty by improving the incomes of the rural poor in Africa.

Appendix 6: supporting fair and ethical business operations

This was a supporting detail page of the main policy document.

We support responsible business, which concerns itself with shaping the day-to-day operations of enterprise, with regard to the implications for workers, communities and their environment; the way that people participate in influencing businesses’ operational decisions; and businesses’ accountability to them.

We do this through supporting principles, codes and standards, such as:

Fairtrade certification

Through Fairtrade certification, producers and workers in international supply chains are guaranteed a minimum wage or price and benefit from a social premium which is used to benefit the community. Our support is helping to strengthen the Fairtrade certification system, broaden its scope and deepen its influence.

The UK face of Fairtrade is the Fairtrade Foundation, which organises Fairtrade Fortnight each year to raise awareness of the Fairtrade message.

Ethical Trading Initiative

The Ethical Trading Initiative (ETI) is an alliance of business, trade union and voluntary organisations that work to improve the lives of poor and vulnerable people working in factories and farms worldwide.

Our funding is helping ETI to model change that provides benefits to poor working women and men. This will help increase the efficiency and effectiveness of over £15 million spent each year by ETI corporate members on their own ethical trade activities, and positively influence the considerably greater sums these member companies spend on sourcing from developing countries.

For example, DFID support helps ETI play a part in better working conditions for 8.6 million workers in 40,000 supplier companies, and Fairtrade to contribute to farmers receive fair prices for their products and workers receive better wages.

Improving working conditions in developing countries

DFID also supports improvements in working conditions in garment industries in Bangladesh, India and Lesotho, through the Responsible and Accountable Garment Sector (RAGS) challenge fund. RAGS now supports 11 initiatives, aiming to show how better working practices improve workers’ lives and make good business sense, and to stimulate better practice more widely.

UN global compact

DFID also provides the UK government’s contribution to the UN Global Compact. The Global Compact is the world’s largest voluntary initiative for businesses to sign up to a platform aligning their operations and strategies with 10 universally accepted principles.

Appendix 7: the Investment Facility for Utilising UK Specialist Expertise (IFUSE)

This was a supporting detail page of the main policy document.


The Investment Facility for Utilising UK Specialist Expertise (IFUSE) supplies specialist government-to-government expertise to support business environment improvement in DFID’s partner countries and regions, as well as other countries eligible for UK development assistance. IFUSE matches demand for support to business environment initiatives with advice and expertise from a broad range of UK government departments, agencies and related standards bodies in the form of short term, targeted deployments. It takes the burden of financing and organising the provision of expertise away from beneficiaries, DFID country offices and UK government, allowing experts and DFID partner country governments to concentrate on the key issues affecting their investment climate.

What form does IFUSE assistance take?

IFUSE assistance usually takes the form of an in-country deployment by an expert from the UK government, but the facility is designed to be flexible. This means that deployments can also take the form of visits to the UK by DFID partner country government personnel, virtual learning and knowledge sharing events and even desk-based reviews. IFUSE can also be used to support reviews of bigger DFID programmes where a wider perspective may be needed, or to help DFID and other donors develop a business case for a more sustained programme of support.

More detailed information on what IFUSE can help with and how it works in practice can be found in the IFUSE Brochure and the Frequently Asked Questions (FAQs) factsheet below.

What expertise is available through IFUSE?

IFUSE currently works with 26 UK government departments, non-departmental bodies and standards institutions and the list is growing. You can find their profiles and a summary of the expertise they offer below.

IFUSE Expertise

Which countries and regions are covered by IFUSE?

The list is extensive and includes:

  • DFID partner countries

Afghanistan, Bangladesh, Burma, DR Congo, Ethiopia, Ghana, India, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Nepal, Nigeria, Occupied Palestinian Territories, Pakistan, Rwanda, Sierra Leone, Somalia, South Africa, South Sudan, Sudan, Tajikistan, Tanzania, Uganda, Vietnam, Yemen, Zambia and Zimbabwe

  • Regional programmes

Africa, Middle East and North Africa, Asia and the Caribbean

  • UK overseas territories eligible for development assistance

Anguilla, Montserrat, Pitcairn, St Helena, Tristan da Cunha.

How has IFUSE supported investment climate reform so far?

Some examples of recent IFUSE deployments include the following countries and business environment issues:

  • Bangladesh

The Department for Business, Innovation and Skills (BIS) has supported DFID’s latest review of the $55 million Bangladesh Investment Climate Facility, set up to help create productive jobs by creating an environment conducive to investment.

  • Burma

UK Trade and Investment (UKTI) has facilitated roundtable discussions on foreign investment with Burmese MPs and political parties’ Central Executive Committees. More recently in Burma the Office of Fair Trading has provided advice to DFID on how to maintain healthy competition in the malaria pharmaceuticals market in the face of possible distortion by donor subsidies.

  • Ghana

The Government Actuary’s Department is working with the Ghanaian National Insurance Commission and GIZ on the development and delivery of effective microinsurance services for low-income people as part of a more robust insurance market.

  • Kenya, Kyrgyzstan, Mozambique, Nigeria and Tajikistan

IFUSE facilitated participation for delegates from these countries in the joint Better Regulation Delivery Office (BRDO) and World Bank conference in London on reforming the inspection climate to promote sustainable growth.

  • Liberia

BRDO has delivered 2 deployments to promote and implement risk-based business inspection models, providing practical support to improve the effectiveness of the inspection process and engaging business in the reform process.

  • Pakistan

Experts from the Office of Fair Trading (OFT) has trained the Competition Commission of Pakistan (CCP) on bid rigging in public procurement, advanced economic theories and merger analysis. IFUSE has also helped the CCP access world-class competition expertise at the OECD’s competition forum.

  • Tajikistan

Delegates from Tajikistan’s Land Registry Authority participated in the Land Registry and United Nations Economic Commission for Europe’s conference on how land registry offices can find solutions to the ongoing economic crisis affecting global property markets.

  • Tanzania

Experts from Her Majesty’s Revenue and Customs (HMRC) has provided sustained support to the Tanzania Revenue Authority by scoping the establishment taxpayer advocate service and redeveloping the Authority’s website, creating a more stable tax base and improving compliance with the country’s tax regime.

  • Vietnam

Infrastructure UK (IUK) has supported the Vietnam Public-Private Partnerships (PPP) Office to identify options for DFID support to PPP programming. This has contributed to the delivery of a clearer legal and institutional framework for the private sector to form PPPs with the government.

Please see The Civil Service Quarterly blog article profiling IFUSE and giving some illustrative examples of recent deployments.

How do I get support from IFUSE or find out more?

Contact the IFUSE team on:

Email: IFUSE@uk.pwc.com Telephone: +44 (0) 20 7213 3005

IFUSE is managed by DFID’s appointed Managing Agent, PricewaterhouseCoopers LLP.

IFUSE quarterly reports

Quarterly reports for IFUSE are publicly available and are found below:

Year 1

Year 2

Year 3

Appendix 8: research evidence on economic development in developing countries

This was a supporting detail page of the main policy document.

We carry out and fund research to produce high quality evidence on economic growth in poor countries, and we help developing country governments use the evidence to inform their policies.

Private enterprise development

We are working with the Centre for Economic Policy Research to research: constraints on enterprise growth; firm productivity; the dynamics of small and medium enterprises; the informal sector; the role of export-oriented industries in driving growth; and how private sector development can help reduce conflict.

Jobs, skills and growth

We are working with the Institute for the Study of Labour to understand what contributes to creating better jobs in poor countries; how to protect workers while at the same time creating jobs; how to support small enterprises; what types of skills are associated with innovation and productivity growth; and how to effectively support women’s participation in labour markets.


We are working with the Economic and Social Research Council (ESRC) on agricultural productivity and how this contributes to wider economic growth that benefits poor people.

Business productivity

We are funding a series of country case studies on innovation, and working with the World Bank and ESRC to improve the understanding of how to enhance business productivity in low income countries.

Financial sector

We are working with ESRC and others to improve the understanding of how better regulation of the financial sector can stimulate growth in low income countries.


Research under our Africa Community Access Programme contributes to the improved provision and maintenance of over 200,000 km of rural roads in Africa. This is saving money for African governments by promoting the use of low-cost, local technologies and labour.

The International Growth Centre (IGC)

The DFID-initiated and funded International Growth Centre provides independent research, evidence and advice on how to develop policies that support economic growth.

If you’re interested in receiving our quarterly newsletter ‘Growth Research News’ please email: dfidgrowthresearch@dfid.gov.uk

Appendix 9: helping people in developing countries access financial services

This was a supporting detail page of the main policy document.

Small businesses account for over 45% of all employment in developing countries. Their growth is vital to creating jobs and increasing prosperity - yet they are typically thwarted by difficulty in raising finance.

More than 2.5 billion people have no bank accounts or insurance. We will help more than 50 million people have the means to work their way out of poverty, including giving 18 million women access to savings, credit and insurance through programmes to expand the reach of the financial sector, to serve the needs of poor people.

We support and encourage innovative financial sector trusts that work with governments, regulators and financial service providers to support financial sector development. For example, one of these trusts, Enhancing Financial Innovation and Access in Nigeria will help 10 million people get access to finance by 2015.

We support countries to strengthen their financial sectors by making them more stable, efficient and inclusive, so that they better support economic growth and poverty reduction. We fund the World Bank’s Financial Sector Reform and Strengthening Initiative which provides world class technical expertise and assistance to developing country regulators and policy makers. To date, the scheme has supported over 300 projects across 80 countries.

In complement to this, we work through the G20 Global Partnership for Financial Inclusion (GPFI) to engage the global standard-setting bodies - who set the overarching guidelines - to ensure the regulatory environment supports national efforts to increase access to finance for poor people and small businesses around the world.

Women’s access to assets and financial services

We work to help more women gain direct access to, and control over, economic assets. This includes support for increased access to financial services and financial literacy training, increased incomes through more jobs and better working conditions for women, and programmes supporting land reform and inheritance rights to secure women’s rights to own and use property.

We will make sure our cash transfer programmes reach women and support initiatives to give women and girls the skills, confidence and networks that will help them to keep hold of their economic assets and make productive use of them.

We are planning initiatives to improve access to financial services for over 18 million women, to help 2.3 million women access jobs, and to secure access to land for 4.5 million women (including in Rwanda and India).

Financial education

We help poor people protect themselves from financial abuse and educate them to use financial services responsibly. Through innovative approaches to financial education pioneered by the Financial Education Fund across sub-Saharan Africa, we are working to build the financial capability of poor people, investing in them to manage their finances effectively and understand their consumer rights.

Mobile banking

Development in information technology such as mobile phone is making it possible for poor people to receive financial services without having to travel long distances to bank branch and at affordable cost.

Over a billion people own a mobile phone but do not have a bank account. DFID support for the Consultative Group to Assist Poor technology programme alongside the Bill & Melinda Gates Foundation aims to use mobile phones and other technology to help 30 million people get better financial services.

For example, M-PESA is a mobile banking platform introduced in Kenya with DFID support. In Pakistan, we are supporting the mobile banking service easypaisa. Within just 2 years easypaisa covers a larger area than all the banks in Pakistan combined and has processed over 10 million transactions.

Microfinance facility for sub-Saharan Africa

Microfinance involves giving small loans and other financial services to poor people so they can start or carry on small businesses. We recognise microfinance as one of the established options for providing financial services to the poor. We will continue our work to build up microfinance institutions and the development of new products including micro-savings and micro-insurance.

DFID, in partnership with the World Bank, is developing the microfinance capacity building facility for sub-Saharan Africa. It aims to increase access to affordable and quality micro-finance services for the poor by building up the institutional, organisational and human capacity of microfinance institutions.

New Global Small and Medium Enterprise Finance Initiative

In the developing world, small and medium enterprises hold the key to creating new jobs and driving the economic growth that powers development. They employ, on average, two-thirds of the permanent, full-time workforce in the world’s poorest countries.

High transaction costs and high perceived risks prevent banks in developing countries from financing small and medium enterprises, leaving them unable to develop and create the new jobs that are urgently needed in many countries in South Asia and Africa. Therefore, it is vital to unblock commercial lending and allow entrepreneurs from the poorest countries to thrive. This is the aim of the Global SME Finance Initiative, which DFID funds through the IFC.

The UK’s investment of £75 million will help over 200,000 small and medium enterprises in developing countries to access capital, creating over a million new jobs over seven years (2012-19) and driving economic growth in some of the world’s poorest countries. At least a quarter of all loans will be for businesses headed by women.

Entrepreneurs in 15 of the poorest countries in Africa and South Asia are initially benefiting from the Initiative. The Initiative shares the risk of lending to small businesses among donors, development finance Institutions, commercial banks and financial institutions, and gives banks the technology they need to more accurately assess the risks of lending to small businesses.

This new and innovative approach to banking in developing countries will unblock an additional £5 billion of commercial lending to small and medium sized enterprises, enabling up to 35 commercial banks and institutions to improve their product offering, reduce their transaction costs and start lending.

Appendix 10: helping developing countries to improve their provision of basic services

This was a supporting detail page of the main policy document.

We work with developing country governments and other donors, and private sector providers to make health, education and basic services accessible, affordable, equitable, and of better quality for the poorest.

We work as part of a group of donors called the ‘Harnessing Non-State Actors for Better Health for the Poor’ (HANSHEP). This Group seeks to improve the performance of the private sector in delivering better healthcare to the poor.

Our work in education aims to improve learning outcomes and increase employability of the poorest in Low Income Countries. The Center for Education Innovations (CEI) is an online resource which profiles hundreds of innovative, non-state education models and approaches for the poor. CEI also aims to improve linkages between policymakers, researchers, providers and investors to increase the provision of quality education and skills training for the poor, women and girls.

We support the World Bank’s Systems Approach for Better Education Results (SABER) programme, which, among other things, is analysing private sector education and skills training provision in 60 countries / provinces / states in sub-Saharan Africa and South Asia. This work will study government policies and their implementation with a view to improving recommending how developing countries can better leverage private sector expertise and resources to improve learning outcomes for poor people.

We also support initiatives to increase the provision of sustainable water, sanitation and hygiene services to poor people. For example the World Bank’s Water and Sanitation Programme promotes the involvement of domestic private service providers and financiers.

We fund Water and Sanitation for the Urban Poor (WSUP), a non-profit partnership between the private sector, NGOs and research organisations which helps to influence the design and delivery of large scale investment programmes that meet the water and sanitation needs of low income communities.

Appendix 11: enabling the continued flow of remittances

This was a supporting detail page of the main policy document.

Remittances play a vital role in supporting the people and economies of countries around the world. Remittance flows are particularly important for fragile and conflict-affected states. An estimated US$414 billion (around £246 billion) was remitted to developing countries in 2013 by 232 million migrants worldwide.

Globally, we have seen banks withdrawing accounts from Money Service Businesses (MSBs), particularly money remitters, this is one symptom of a broader trend of banks terminating, restricting or denying banking services from higher-risk customers in order to reduce costs and exposure to risk.

In October 2013, the government set out an action plan to help identify market-led solutions for ensuring the continued flow of remittances.

Action Group on Cross Border Remittances

The Action Group on Cross Border remittances brings together participants from industry, government, regulators, civil society and international partners to take forward these actions while improving dialogue and trust between stakeholders in the UK remittance market.

Terms of Reference

The Action Group is chaired by Sir Brian Pomeroy and includes representatives from the British Bankers Association, the International Association of Money Transfer Networks (IAMTN), the Payments Council, the Charity Finance Group, the World Bank and the Financial Conduct Authority. Government participants include HM Treasury, the Department for International Development, HM Revenues and Customs, Foreign and Commonwealth Office, the Cabinet Office and the National Crime Agency.

The UK-Somali Safer Corridor pilot

The Safer Corridor Pilot aims to create a more transparent and safer system for Somalis in the UK to send money back home. The Safer Corridor Pilot is implemented by the World Bank, and funded by DFID. This work is taking place in close collaboration with Somali community representatives, industry representatives (including the Somali Money Services Association), non-governmental organisations and others.

For more information, take a look at:

Guidance working groups

Guidance to prevent money laundering

The Guidance Working Group of the Action Group on Cross Border Remittances was tasked with preparing guidance for money service businesses on how to comply with their anti-money laundering and terrorism financing obligations. The following HMRC guidance has been approved by the Money Laundering Advisory Committee (MLAC) and HM Treasury.

The guidance replaced HMRC’s previous anti money laundering guidance for MSBs (MLR8 July 2010). Approval by HM Treasury means that HMRC and the courts will consider whether a person has followed this guidance when deciding whether they have failed to comply with the Money Laundering Regulations.

The guidance is available in the document Money laundering guidance for money service businesses

Any questions on the guidance should be sent to moneylaunderingpolicy@hmrc.gsi.gov.uk

Guidance to help identify financial crime

The Joint Money Laundering Steering Group (JMLSG) produced guidance for those operating in the financial services sector to assist them in identifying and managing financial crime risk in MSBs as clients.

The guidance has been produced in full consultation with the JMLSG members via its editorial panel, and following discussion with the AUKPI. It can be found at: JMLSG guidance

12 August Speech from the Financial Crimes Enforcement Network, the lead US anti-money laundering supervisor addressing the issue of de-banking and MSBs.

Remarks of Jennifer Shasky Calvery, Director of the Financial Crimes Enforcement Network, addressing the issue the of de-banking of MSBs, 12 August 2014.

Evidence to the Treasury Select Committee on bank de-risking, which is being considered as part of the Committee’s Inquiry on the Treatment of Financial Services Consumers.

Dates and rotation of meetings

The Action Group last met on 27 March 2015.

A summary of progress so far as January 2015 can be found in the Action Group on Cross Border Remittances - 6 month update

Date Rotation Notes
29 April DFID -
27 May HMT -
25 June Cabinet Office -
29 July FCA -
August - Currently no meeting for august
23 September NCA -
October - Currently no meeting for august
26 November FCO -
10 December HMRC -

Summaries of past meetings are available below.

Appendix 12: providing debt relief for developing countries

This was a supporting detail page of the main policy document.

Long-term debt relief provides developing countries with the resources to spend on health, education, infrastructure and other investments. HM Treasury leads the UK’s international policy on debt, including debt relief. It works closely with DFID on Low Income Country debt issues. We work on domestic policy and the UK’s international engagement, alongside official creditors and financial institutions to provide debt relief for developing countries. We are an active supporter of the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).

The Heavily Indebted Poor Countries (HIPC) Initiative

The HIPC co-ordinates global action on debt relief, with the aim of ensuring no poor country faces a burden of debt it cannot manage. Creditors agree to provide debt relief to countries that complete the HIPC process. During the process, countries must meet certain criteria, commit to poverty reduction through policy changes and demonstrate a good track-record over time.

We are the second largest contributor to the HIPC Trust Fund, which helps multilateral institutions meet the costs of debt relief under HIPC.

The Multilateral Debt Relief Initiative (MDRI)

We also offer debt relief under the Multilateral Debt Relief Initiative (MDRI). The MDRI goes further than the HIPC initiative and provides a group of low income countries, who have completed or are due to complete the HIPC process, 100% debt relief, from the World Bank, IMF and African Development Bank.

We also give debt relief for the poorest non-HIPC countries provided we are convinced they this will be used this to help poor people.

Paris Club

HM Treasury also leads the UK delegation to the Paris Club, an informal group of 19 nations, who are owed money by other countries around the world. The Paris Club attempts to ease the payment difficulties of the countries that owe money, so that they do not default and are able to repay the creditor nations. The Club meets around 10 times a year in Paris.