INTRODUCTION

According to the World Health Organization (WHO) and the World Bank (WB), exorbitant healthcare expenses are a major driver of financial vulnerability, poverty, and bankruptcy for low- and middle-income people worldwide.

13.2%

As of 2017, 996 million people (13.2 percent of the global population) faced catastrophic healthcare expenses, defined as spending at least 10 percent of their household budgets on direct health expenses.4

In most countries, access to financing directly determines access to quality healthcare.

The link between financial and physical health is a key driver behind the worldwide commitment to universal health coverage (UHC). The central aim of UHC is to ensure that all people have access to health services when and where they need them without suffering financial hardship.5 Importantly, national policies and programs at the highest levels of government have made UHC a key political issue requiring a whole-ofgovernment approach. As countries move towards realizing the ambitious vision of high quality and affordable healthcare for all people, it is recognized that the success and sustainability of UHC hinge on the financial resilience of governments and households.

Financial inclusion means that individuals have access to useful and affordable financial products and services that meet their needs and are delivered responsibly and sustainably.

According to the World Bank, digital financial inclusion involves the “deployment of the cost-saving digital means to reach currently financially excluded and underserved populations with a range of formal financial services suited to their need that are responsibly delivered at a cost affordable to customers and sustainable for providers6.” Through digital financial services, previously financially excluded and underserved populations can now access payments, transfers, savings, credit, and insurance products and services, including for healthcare. Digital financial inclusion provides public and private sector payers with a broader set of tools to reach underserved populations and to achieve UHC.

To understand how DFS models are used to support financial and health access, this report analyses:

> the link between financial inclusion and health and how DFS models can improve both health and financial access for low- and middle-income populations

> the global and regional trends in the application of digital financial services for healthcare

> the use of DFS for health models that support the financial inclusion of women and other vulnerable populations

> the use of DFS to support the general population in the midst of health emergencies such as natural disasters and pandemics

> highlight features of a regulatory environment that enables the functioning of DFS for health models while safeguarding public interest.

This paper begins by looking at five regions of the world – Africa, Asia, Eastern Europe, Latin America and the Middle East – to identify and assess the current landscape of DFS for healthcare models. The findings were based on a comprehensive global landscape assessment through literature review of existing initiatives where digital financial services were being used to enable access to healthcare services. We defined the scope of digital financial services to include digital versions of payments, credit/lending, savings, remittance services, and Insurtech; we included those programs that demonstrated the use of digital financial services that would improve access to healthcare services, information, or payments. To validate or refine the findings, we conducted interviews with finance, healthcare and policy experts and hosted focus groups with AFI member institutions.

This paper is intended for central banks and regulators interested in understanding the viability of DFS models in health and the successes and challenges for financial service providers (FSPs) working with healthcare and financial regulators. The report outlines trends, case studies and insights from interviews with DFS, healthcare and financial inclusion experts and practitioners to frame the decisions and outlook by regulators as DFS for healthcare models mature and expand to populations around the world.

4 World Health Organization; World Bank. 2021. Tracking Universal Health Coverage : 2021 Global Monitoring Report. World Health Organization and World Bank.

5 World Health Organization. 2021. Universal Health Coverage.

6 World Bank. 2015. Digital Financial Inclusion.