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The G20’s “Roadmap Towards Better, Bigger, and More Effective Multilateral Development Banks (MDBs)” is an ambitious blueprint for transforming MDBs to address global development challenges. The roadmap sets bold objectives: scaling MDBs’ financing capacity, fostering collaboration, and integrating climate-related goals into development strategies. These priorities underscore a strategic shift toward a more responsive, impactful multilateral finance system. Yet, while this roadmap reflects significant forward-thinking, several areas call for more specific attention and clearer pathways for actionable outcomes. These gaps — especially regarding governance, private sector engagement, and debt sustainability — are crucial if MDBs are to realize their full potential in aiding low-income and developing economies.

Among the roadmap’s most promising aspects is its target of enhancing MDB lending capacity by $300–400 billion over the coming decade. This increase is essential to meet the financing needs of developing economies, aligning with the G20’s Capital Adequacy Framework (CAF) Review, which promotes the optimal use of MDB balance sheets. Expanding MDB capacity can address a broad spectrum of urgent needs, from poverty alleviation and infrastructure to climate adaptation. However, the roadmap stops short of outlining how these funds will be generated — a critical element for effective implementation. Another strength lies in the roadmap’s call for enhanced collaboration among MDBs. By promoting synergy, the G20 aims to optimize each institution’s unique strengths, mitigate operational redundancies, and amplify collective impact. Such an approach is increasingly relevant as MDBs tackle intertwined issues like climate change and financial stability. The roadmap’s focus on aligning MDBs with the Paris Agreement objectives acknowledges climate risks as systemic threats, ensuring that MDB resources are directed toward sustainable and resilient growth. Notably, the World Bank set up the Global Collaborative Co-Financing platform as a convening mechanism earlier this year to help improve coordination among Multilateral Development Banks and other co-financing partners. One objective is that, in its mature form, the platform will enable it to channel additional capital for development scale and impact.

However, some crucial gaps in the roadmap may hinder its implementation and broader effectiveness. A primary concern is the lack of a concrete governance reform framework. Current MDB governance structures often underrepresent the interests and voices of developing nations, risking an imbalance that could undermine MDBs’ ability to address diverse global challenges. Historical precedents, such as the Bretton Woods institutions’ reform after WWII, underscore how governance restructuring has been critical in adapting to shifting global economic power. A lack of representation for developing economies risks perpetuating an imbalance that could impede the MDBs’ effectiveness. This aspect ties directly to themes from the recent BRICS Kazan Declaration. The role of underrepresented voices in multilateral settings is increasingly seen as pivotal for effectiveness.

Furthermore, while the roadmap acknowledges the need for private-sector engagement, it does not offer specific, actionable strategies. The private sector is crucial to scaling climate and infrastructure investments but mobilizing private capital requires more than intentions. The roadmap could benefit from clear strategies for risk-sharing mechanisms, public-private partnerships, and blended finance models. As discussed in ORF America’s Background Paper #13, Rebooting Development Finance: An Agenda for Reforming Multilateral Development Banks, private sector confidence hinges on robust instruments that effectively mitigate risks while aligning with their investment return expectations. The Asian Development Bank’s recent success in leveraging private finance for climate projects is a testament to the power of such mechanisms when tailored to investor needs. For MDBs to attract substantial private capital, they must introduce a sophisticated financial instrument toolkit that bridges the public and private sectors.

Debt sustainability is another crucial area where the roadmap needs to catch up. Many developing countries already grapple with high debt burdens, and MDBs play a critical role in providing concessional finance and supporting debt restructuring. While institutions like the IMF and World Bank have advanced global debt discussions, MDBs must engage actively to prevent their financing from aggravating existing debt challenges. The interconnectedness of MDB lending and debt sustainability makes it essential for MDBs to incorporate debt assessments into project planning, ensuring that lending practices support long-term financial health.

Realizing the roadmap’s ambitions will entail significant operational shifts within MDBs. Resource mobilization, for instance, is essential for scaling up lending, but the roadmap lacks clear strategies for securing additional capital or leveraging innovative financing. The G20’s Independent Expert Group has underscored the need for actionable plans. MDBs could struggle to translate the roadmap’s targets into effective financial solutions without tangible commitments from major shareholders. Operational efficiency is another area crucial to the roadmap’s success. To meet expanded mandates, MDBs must improve processes to facilitate faster project approval and disbursement, particularly for climate and infrastructure projects that require agility. The G20 sustainable finance working group’s recommendations on streamlining accreditation and reducing approval times are critical if MDBs are to respond effectively in an evolving financial landscape. The roadmap also lacks a comprehensive monitoring and evaluation framework, essential for tracking progress and adjusting strategies. Establishing metrics and timelines is necessary to assess reform implementation and identify potential obstacles. The Center for Global Development’s MDB Reform Tracker offers a helpful benchmark model, highlighting areas where MDBs have succeeded or need improvement.

The roadmap’s impact extends significantly to low-income and developing countries. The proposed increase in MDB financing could give these countries greater access to affordable capital for critical projects, accelerating their progress toward Sustainable Development Goals (SDGs). Integrating climate considerations into MDB mandates allows for targeted climate adaptation and resilience support, helping vulnerable nations manage climate-related risks. Enhanced MDB collaboration could strengthen capacity-building efforts, enabling low-income countries to build the skills and institutions needed for sustainable development. By making MDB resources more accessible and tailored to local needs, the roadmap offers the potential to bolster long-term economic stability and resilience across regions where it is most needed.

The roadmap’s success will have profound implications for global finance. By addressing systemic risks such as climate change, MDBs can contribute to deepening global capital markets and a more resilient international financial system, mitigating potential economic shocks from climate events. Effective private sector mobilization, if realized, could redirect capital flows towards sustainable projects worldwide, fostering a more balanced and resilient global finance landscape. Furthermore, the emphasis on collaboration could serve as a precedent for more robust multilateral responses to shared challenges, potentially setting a new standard for international financial cooperation to aid global financial stability.

The G20’s roadmap for MDB reform is a bold step toward reimagining multilateral finance for a world facing unprecedented challenges. However, the roadmap’s success will depend on closing critical gaps. Governance reforms that give developing countries a greater voice, concrete strategies to mobilize private capital and comprehensive debt sustainability measures are essential for realizing its vision. Drawing from institutional evolution and recent financial crises, MDBs have a unique opportunity to align more closely with global needs. By addressing these areas, MDBs can become “better, bigger, and more effective,” driving meaningful progress toward a stable and equitable global future.

Udaibir Das is Visiting Professor NCAER and Distinguished Fellow at ORF America.  Views are personal.

In India, where only 33% of women have an active bank account compared with 45% of men, the consequences for financial inclusion and economic growth are significant.

By gaining greater control over their finances, women can lift themselves and their families financially and reduce their vulnerability to economic hardship.

A financially literate and economically empowered female population means more informed financial decisions at the household level, increased savings and investment, and ultimately, a more robust and inclusive economy. In an era of complex financial landscapes, the persistent gender gap in financial literacy remains a significant barrier to women’s economic empowerment.

This disparity, evident both globally and in India, demands urgent attention. Recent data from the 2023 OECD/INFE International Survey reveals that women globally score less than men in financial well-being and resilience.

The S&P Global FinLit Survey states that worldwide, 35% of men and 30% of women are financially literate. In India, the situation is even more pronounced, with only 21% of women deemed financially literate compared with 27% of men, according to a 2020-21 National Centre for Financial Education (NCFE) survey.

The gender gap in labour force participation directly impacts women’s financial independence and literacy. By gaining greater control over their finances, women can lift themselves and their families financially, reduce their vulnerability to economic hardship, protect themselves from exploitation in the informal sector, and enhance their capacity to participate fully in productive, measurable economic activities.

The International Labour Organization’sWorld Employment and Social Outlook: Trends 2023 report sheds further light on the gender disparities in the global labour market. The report highlights that the global gender gap in labour force participation remained stagnant in 2022, with 47.4% of women participating in the labour force compared with 72.3% of men.

The gender wage gap further exacerbates the financial literacy divide. The ILO report emphasises that women are more likely to be in informal employment, particularly in lowand lower-middle-income countries.

Government initiatives

In India, over 90% of women in the workforce are in informal employment and such prevalence of informal work often correlates with lower wages, job insecurity, and limited access to financial services and education. The Global Wage Report of 2022-23 cites women’s average pay across the world is at about 20% less than men.

In India, it is even worse, with women earning, on an average, 34% less than men for performing the same job. This disparity affects women’s current financial situation as well as their long-term financial planning and security.

India requires an effective, well monitored multi-pronged strategy that integrates financial education into school curricula nationwide

To meet the challenge, the Indian government has launched several initiatives. The Pradhan Mantri Jan Dhan Yojana has made strides in financial inclusion, with women holding about 55% of the 460 million accounts opened.

The National Strategy for Financial Education and the financial literacy efforts of the government and regulators aim to promote financial knowledge, especially among women and the rural population. The Digital Sakhi Programme of the Reserve Bank of India provides training for rural women in digital financial literacy, aiming to bridge both gender and digital divides.

Women with lower financial literacy are less likely to participate in the financial markets, more prone to debt, and less prepared for retirement. In India, where only 33% of women have an active bank account compared with 45% of men, the consequences for financial inclusion and economic growth are significant.

To truly close the gap, we need to look beyond to learn from global innovative approaches. Sweden’s financial literacy programme, integrated into the national curriculum from an early age, offers a model for early intervention

Australia’s Women’s Money Toolkit provides tailored financial advice for women at different life stages. The UK’s Money Advice Service uses behavioural insights to design more effective financial education programmes. Japan’s “Financial Park” concept offers interactive financial education experiences.

India can draw learnings from Rwanda’s success in integrating financial literacy with microfinance programmes. By coupling access to financial services with education, Rwanda has seen significant improvements in women’s financial behaviour and outcomes.

To make a quantum jump forward, India requires an effective, well monitored multi-pronged strategy that integrates financial education into school curricula nationwide, with a special focus on empowering girls. Financial literacy and education for women can be greatly enhanced through accessible and easy-to-understand modules.

Process, concept literacy

Programmes should use audio-visual booklets to effectively communicate complex topics, ensuring that women fully grasp the products and processes involved. Moreover, according to the National Strategy for Financial Inclusion (NSFI), a balanced focus on both process literacy—understanding how financial systems work—and concept literacy will empower women with practical skills, ensuring manifestation of financially prudent behaviour.

Employers should be encouraged to provide financial education programmes for female employees to help them understand and negotiate fair wages. Technology can be leveraged to develop mobile apps and digital platforms to make financial education more accessible, especially in rural areas with women focus.

Promoting successful women in finance as role models and establishing mentorship programmes is crucial, alongside the implementation of policies to close the gender wage gap and incentivise financial institutions to create products tailored to women’s needs. A gender-disaggregated research may be prioritised to address specific barriers women face in achieving effective financial literacy and equity.

In India, only 21% of women are deemed financially literate compared with 27% of men

Public-private partnerships involving government agencies, regulators, financial institutions, NGOs and tech companies can foster innovative solutions. Targeted programmes for women in the informal sector can help improve their financial literacy and access to formal financial services.

Addressing cultural barriers through awareness campaigns is essential to challenge societal norms that hinder women’s financial independence and literacy. Specific programmes for long-term financial planning and retirement savings should be calibrated to account for women’s longer life expectancy and often interrupted career paths.

Over the years, financial inclusion has evolved from a bank-driven model to a multi-stakeholder approach, with telecom service providers and fintech companies now playing key roles in advancing inclusive growth. The path to closing the gender gap in financial literacy and economic equality is clear, though challenging.

It requires sustained effort, innovation, and collaboration across sectors. By empowering women with financial knowledge and skills, and addressing systemic inequalities like the wage gap, India can not only advance gender equality but also unlock significant economic potential.

It’s time to realise that gender equality should not rest on women’s reservation or better employment opportunities but should continue to achieve sustained financial education and empowerment of women. As we work towards the goal of improving female financial literacy, we’re not just bridging knowledge and wage gaps, ensuring dignity, confidence and well-being as also paving the way for a more equitable society, stronger and more resilient society.

The time to act is now. Every step taken towards improving female financial literacy and economic equality is a step towards the Viksit Bharat.

Dr CS Mohapatra is the chair professor – IEPF, and Depannita Ghosh a research analyst -IEPF, at the National Council of Applied Economic Research

The overall health insurance coverage of house holds is impressive but pricier, complex self-financed insurance products hinder wider adoption.

One of the most concerning and unsustainable aspects of healthcare financing is the significant out-of-pocket (OOP) expenses that households bear. These costs are aggravated by the relentless rise in medical expenses and inflation. Health insurance, often called medical insurance, acts as a vital buffer. This coverage can come through direct payments to healthcare providers or reimbursements. Health insurance is increasingly recognised as a crucial financial tool designed to to safeguard the financial stability of the insured.

Health financing schemes can be self-financed, government-financed, or employer-financed. The Comprehensive Annual Modular Survey (CAMS) from the NSS 79th round (2022-23) reveals that 61.5% of urban households and 59.9% of rural households in the country have at least one member covered by such schemes. In urban areas, 50.2% of the lowest income quintile have coverage, rising to 77.6% in the highest. In rural households, the coverage is 54% for the lowest quintile and 66.1% for the highest. This data indicates a positive trend in health coverage accessibility across income levels in both urban and rural settings.

Analysis at the granular level reveals that 18.9% of urban households and 29.5% of rural households have at least one member covered under the Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY). This programme offers health coverage of Rs 5 lakh per family, each year, for secondary and tertiary hospital care, specifically targeting the poorest and most vulnerable 40% of the population. Since the scheme is designed for low-income families, its reach is notably higher among household.in the lowest income quintiles in both rural and urban areas.

The Janani Suraksha Yojana (JSY) is a programme dedicated to lowering maternal and neonatal mortality by encouraging institutional deliveries among economically disadvantaged pregnant women. Although its reach is modest, covering just 1% of urban households and 2.2% of rural households, the scheme’s coverage remains fairly consistent across all income groups. JSY’s goal of fostering safer births among low-income families highlights its vital role, especially in rural regions.

The Employees’ State Insurance Scheme (ESIS), managed by the Employees’ State Insurance Corporation (ESIC), offers targeted coverage for health issues commonly faced by workers. Currently, 7.7% of urban households and 1.6% of rural households benefit. from this scheme. Analysis reveals that the coverage is more prevalent among households in higher income quintiles, both in rural and urban areas, suggesting that the scheme’s reach aligns more with the middle- and upper-income workers.

The Central Government Health Scheme (CGHS), along with the Ex-Servicemen Contributory Health Scheme (ECHS) for retired armed forces personnel, and various health schemes under the Railway Ministry, collectively provide comprehensive medical coverage. for government employees and pensioners. These schemes cover approximately 3.2% of urban households and 1.1% of rural households. Designed to include all eligible family members of the insured, these programmes ensure holistic healthcare support for the entire household, with benefits provided through reimbursements.

Private sector employers often provide health insurance to employees, either as cashless claims or through reimbursement options, though this is largely limited to the organised sector. As a result, about 6.7% of urban households and just 1.1% of rural households have at least one member with this type of employer-sponsored insurance. Meanwhile, workers in the unorganised sector benefit from other supportive programmes, such as AB-PMJAY, the Unorganised Workers’ Social Security Act, the Employees Compensation Act (for those not covered under ESIC), and various health initiatives under the Labour Welfare Scheme.

State programmes score in reach

Among all the health financing schemes, state government programmes stand out for their broad reach. Unlike most schemes, these state-run health insurance plans strive for universal coverage. Approximately 22.5% of urban households and 26.8% of rural households have at least one member enrolled in a state health insurance scheme. Notably, these programmes maintain a fairly even spread across all income groups, both in urban and rural areas, underscoring their inclusive approach to healthcare access.

For individuals not covered by the above programmes, health insurance from commercial insurance companies is often the only option. Although these plans are accessible to most, subject to health requirements, their reach remains limited. Only 8.3% of urban households and a mere 1.1% of rural households have at least one member covered by private insurance. Given the complexities and higher premiums, these products are typically purchased by those in the higher income brackets.

Households with at least one member covered by other forms of health insurance make up 6.3% of urban households and 3.4% of rural households.

While approximately 60% of the households have at least one family member with some form of health insurance, there is a crucial concern that lingers. How many of these individuals are insured? The NSS data leaves us in the dark regarding the number of family members covered in these households, highlighting a significant gap in understanding the true extent of health coverage.

Government-funded health schemes offer affordability, often at no cost, but self-financed insurance products are pricier and more complex to understand. This discourages many from pursuing health insurance altogether. Also, there is a noticeable increase in premium costs, especially in the aftermath of Covid.

Reducing tax rates can entice more people to embrace health insurance, but simplifying insurance products is equally vital for wider adoption. Starting January 1, 2024, the IRDAI has mandated insurance companies to provide a simplified customer information sheet (CIS) but policy documents remain complex. Given that health insurance is a personalised product, a unique marketing approach with simplified product information can be a game changer.

(Palash is Fellow at the National Council of Applied Economic Research, New Delhi; Wankhar is a retired officer of the Government of India and Yashika is a Research Associate at NCAER)