To ask the Secretary of State for International Development whether his Department's funding for microfinance projects is co-ordinated with other policies for the purposes of encouraging an environment for microfinance services.

The Department for International Development (DFID)'s support for microfinance is part of a comprehensive approach to financial sector development, which aims to provide sustainable, quality and affordable financial services to individuals, households and firms in developing countries. Programmes supported by DFID provide a range of interventions to improve policy and regulation; strengthen the capacity of financial institutions, expand the evidence base on financial inclusion and innovate new financial products that meet the needs of the poor.

For example, the Enhancing Financial Innovation and Access (EFfinA) programme funded jointly by DFID and the Bill and Melinda Gates Foundation in Nigeria shows how integrated financial sector development creates a strong enabling environment for sustainable microfinance services. EFinA is: (1) supporting the Central Bank to develop a new financial inclusion strategy that includes making microfinance more stable, sustainable and responsive to poor client needs; (2) spurring the development of new financial products, including micro-savings, through grants from its Innovation Fund; (3) providing targeted capacity building for financial institutions including microfinance providers; and (4) conducting research on the supply, demand and use of financial services among poor households.