Harnessing the promise of digital finance to reduce inequalities
Patrick Njoroge
On August 26, 2020, the United Nations Secretary-General (UNSG) António Guterres launched the report of his Task Force on Digital Financing of the Sustainable Development Goals (The Taskforce), on which I have served for the last 18 months.
The report titled, “People’s Money: Harnessing Digitalisation to Finance a Sustainable Future,” focuses on the needs of ordinary people.
The financial system, the report concludes, must serve individual citizens, savers, investors, borrowers, and taxpayers.
It must leverage digital technology to put people back in the driver’s seat of their finances, so that they can invest in themselves and their families, communities, countries, and the planet.
Governments, regulators, and financial institutions should support and facilitate the disruptions that will get us there.
Launching the report, the UNSG António Guterres said: ‘‘Digital technologies, which are revolutionising financial markets, can be a game changer in meeting our shared objectives.
The taskforce provides leadership to harness the digital revolution.”
Digitisation can propel us towards achieving the Sustainable Development Goals (SDGs).
The global response to the coronavirus pandemic (Covid-19) crisis demonstrates how digitisation can be harnessed to support vulnerable people, reduce inequalities, sustain livelihoods and maintain our social fabric.
Harnessing digitalisation to develop a citizen-centric financial system to accelerate financing for the SDGs requires development of digital financing ecosystems.
Governments and regulators are seeking to support digital financing ecosystems through infrastructure development, active industry engagement, supportive regulatory frameworks and demand side capacity building.
In the East African Community (EAC), we have been at the frontier of digital finance.
Since 2007, digital financial services have transformed our financial sector and indeed the lives of East Africans.
During the pandemic, EAC countries including Kenya, Rwanda, Uganda and Tanzania have been global leaders in encouraging the use of mobile money to address the health and economic dimensions of Covid-19.
Measures including waiver of charges on low value mobile money transactions and enhancement of mobile money limits, have facilitated official and personal transfers across the region in a time of great need.
Notably, the taskforce drew significant inspiration from the advances in digital finance in the EAC.
This included a convening in Nairobi in July 2019 during the Afro-Asia Fintech Festival.
The taskforce supported a Hackathon launched at the festival to draw on innovative ideas from African fintechs on how to leverage technology to support financing of the SDGs.
Not surprisingly, the two winners were from EAC countries –Kenya and Uganda with solutions on how to promote savings through savings and credit co-operatives and financing of sustainable coffee value chains. — Patrick Njoroge is CBK Governor
