UNCDF’s mandate from the UN General Assembly (1966) is to “assist developing countries in the development of their economies by supplementing existing sources of capital assistance by means of grants and loans”. The mandate was modified in 1974 to focus on “first and foremost the least developed among the developing countries”.
This original mandate -- to promote economic development in the least developed countries – remains highly relevant today. Economic growth is necessary to enhance living standards, reduce poverty and cope with the world’s growing population. And it must be socially and environmentally sustainable to deliver maximum benefits for current and future generations.
Within its economic development mandate UNCDF focuses on public and private financing mechanisms. Effective and efficient finance – in both the public and private sectors -- can spur economic growth and make it more sustainable and inclusive. UNCDF’s focus on financing mechanisms has special relevance for least developed countries, where public financial management is often weak, and private financial systems often underdeveloped and inaccessible to poor people.
Public Sector: strengthening public investment at the local level. UNCDF supports decentralization and strong financial management within decentralized systems. This leads to improved allocation of scarce public resources, stronger and more responsive local governments and, ultimately, better public investment – in roads, marketplaces, irrigation systems and other basic infrastructure that improves people’s lives and lays the foundations for economic growth.
Private Sector: ensuring financial services reach poor people and small businesses. Inclusive financial systems promote private sector driven, pro-poor growth. By ensuring formal financial systems include poor people – with savings, credit, payments, insurance, remittances – UNCDF helps poor families and small businesses generate income, build assets, invest in opportunities and strengthen resilience to setbacks.
UNCDF’s support is ultimately designed to promote sustainable and inclusive growth that empowers people and countries to unleash their potential.