The Financial Sector Reform and Strengthening Initiative, FIRST, is a multidonor grant facility that provides short- to medium-term technical assistance (TA) to promote sounder, more efficient, and inclusive financial systems. Since its inception in 2002, FIRST has funded over 600 projects in about 120 countries, with commitments over US$ 135 million.
FIRST is currently supported by five donors: the Department for International Development of the United Kingdom (DFID), Germany’s Federal Ministry of Economic Cooperation and Development (BMZ), the Ministry of Finance of Luxembourg, the Ministry of Foreign Affairs of the Netherlands (MFA), and the State Secretariat for Economic Affairs of Switzerland (SECO), as well as the World Bank Group (WBG) and the International Monetary Fund (IMF).
FIRST is guided by a Governing Council (GC) comprising of one representative of each of FIRST’s donors, a representative from the WBG and a representative from the IMF. The Governing Council is currently chaired by the representative from the Ministry of Foreign Affairs of the Netherlands. The World Bank administers FIRST’s day-to-day operations through the Secretariat which is located in Washington, D.C. and is housed in the WBG’s Finance and Markets (F&M) Global Practice. The Secretariat is comprised of professional and administrative staff employed by the WBG and is headed by a Program Manager.
FIRST’s specific objectives are to:
- Fund technical assistance in the areas of financial sector regulation, supervision and development in response to country demands, provide support to countries to strengthen their financial systems or implement standards and codes in advance of Financial Sector Assessment Programs (FSAPs) or Reports on Standards and Codes (ROSCs), and facilitate systematic follow-up of related recommendations.
- Assist recipients in preparing prioritized action plans addressing financial sector development and the sequencing of reforms (for example as a follow-up to FSAPs), and advise clients, especially in low income countries, on the implementation of financial sector development programs.
- Promote coordination in the delivery of financial sector technical assistance and capacity building, drawing particularly on private sector expertise.
- Support research on and the dissemination of best practices and useful tools related to financial sector reform and development in low- and middle-income countries.
- Work with international standard-setting bodies and other relevant partners to broaden the base of providers supporting countries’ efforts to implement standards and codes in accordance with FSAP and ROSC recommendations and strengthen their financial systems.
- Support capacity building and local knowledge exchange.
FIRST’s Value Proposition:
FIRST has distinguished itself as an effective catalyst for broader reform programs through its targeted technical assistance interventions, as well as support to develop and implement financial sector strategies. Its effectiveness is underpinned by the following basic principles:
- A demand-driven approach with open access
FIRST aims to be demand-driven and pursues to identify innovative and effective approaches in the delivery of technical assistance. To this end, FIRST accepts technical assistance requests from a wide range of sources for the benefit of client countries, with the WBG and IMF as the designated implementing entities. Ensuring country ownership has been one of the critical success factors in the implementation of FIRST funded projects. This arrangement also promotes collaboration among a wide range of institutions, including other bilateral agencies and multilateral development banks.
FIRST seeks to ensure that its activities are complementary to those from other sources and that its funding does not substitute for or displace more suitable or appropriate assistance available from other sources.
- A clear focus on development impact
FIRST’s projects and programs are designed with clear intended results/indicators, to systematically capture client feedback at completion, and to follow-up during post-completion stage. For larger grants (under Programmatic Window), numerical targets are required to be set up front, and progress is tracked annually. Overall, the robust results measurement approach adopted at FIRST has been serving the quality control, communication and learning purposes. FIRST endeavors to promote learning and knowledge sharing in the area of financial sector technical assistance.
- Leveraging World Bank and IMF technical expertise
FIRST’s business model is built upon close collaboration between the World Bank Group and the International Monetary Fund (IMF), leveraging on their presence on the ground and expertise in designing and implementing financial sector reforms. In that respect, policy reform recommendations are based on sound analytical foundation, deep country and financial sector knowledge.
The FIRST Charter is the constitutive document of FIRST which sets out FIRST's objectives, policies and procedures.