We are pleased to share a report from the Financing for Development Conference from Ericsson’s Vice President of Sustainability and Corporate Responsibility, Elaine Weidman-Grunewald, who participated in a side event covering new initiatives to advance financial inclusion through digital technology.
The side event highlighted Ericsson’s research, which shows that while 70% of the world’s population will have a smart phone in 2020, access to 3G/4G data networks is still severely limited in developing regions (Africa and the Middle East currently have only 20% penetration of 3G/4G). At the same time, much of the innovation in digital finance has started in Africa, so one can only imagine what will happen as broadband access in these regions climbs to 70% in the coming year.
In fact, significant progress is currently being made in digital finance, such as the rapid spread of mobile banking, which as The World Banks reports, reduced the unbanked population from 2.5 billion to 700 million between 2011 and 2014. The panelists agreed that various actors, particularly banks and telecom services, must work together to create a network of partnerships (or financial “ecosystems”) that will drive development of the sector. Weidman-Grunewald also calls for “standardization and interoperability” between borders and technologies and the need to ensure secure and private transactions. She ends her post by emphasizing public-private cooperation: “Private sector innovation and scale were the themes of the day, but we also need models that meet development goals and are commercially viable.”
Improving private sector participation would accelerate progress on the sustainable development goals. Unfortunately, as there were only six business representatives out of hundreds of UN and government officials at each of the three UN General Assembly “round tables,” it is clear that the private sector’s role in the development agenda has yet to be fully recognized.
Indeed, as Weidman-Grunewald observed in a second post from Addis about the Business Forum organized by the Business Sector Steering Committee for Financing for Development, the private sector is “far from leveraged.” However, she is still hopeful, as there is an emerging consensus that it has a tremendous role to play and that “governments could make positive impacts on their development agendas” if ODA and government finance came in “where the innovation potential exists but struggles to achieve scale.”