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Digital Financial Inclusion: Igniting the Sustainable Development Goals

Digitalization has changed the delivery patterns of financial services all over the world. There has even been a greater push for digitalization and emerging technologies to innovate the financial ecosystem to bridge the gap between underserved populations and conventional financial services. Its importance has caught on at a global level and has been cemented as a driving force and pathway to achieving the 17 Sustainable Development Goals (SDG).

In launching this Digital Money Blog Series, I mentioned the intent was to focus on digital money being a driver of financial inclusion, more specifically, Digital Financial Inclusion. When we speak of digital financial inclusion, what do we mean exactly?

Using the World Bank’s definition, Digital financial inclusion involves the deployment of cost-saving digital means to reach currently financially excluded and underserved populations with a range of formal financial services suited to their needs that are responsibly delivered at a cost-affordable to customers and sustainable for providers.

In the past few blog posts, I’ve also explored on a regional basis the transformation from bricks to clicks, showcasing how traditional banking systems and infrastructures have adopted and utilized technological innovations and are now operating digitally which has led to significant access to, adoption and usage of digital financial services. Evidence of this can be showcased through mobile money adoption in East African countries such as Kenya, the rollout of India’s digital-enabled national ID system, and digital payment solutions in the Philippines, Brazil, and other territories; all resulting in new approaches fostering inclusion. This has resulted in millions of formerly underserved, excluded, and unbanked individuals and societies being able to move away from cash-based transactions to now using mobile phones and other digital technologies to access a wide array of financial services including payments, transfers, savings, and more.

For a better understanding of the transformative power of digital financial services with evidence-based solutions that have impacted communities across the globe, you may preview this compendium - Igniting SDG Progress through DFI.

Whilst there lies an opportunity to enable each of the 17 SDGs, the one I found particularly interesting and can be attributed to the work of the Interledger Foundation in enabling access and inclusivity is Reducing Inequality (SDG 10). The opportunity exists for digital finance to be the equalizing force for social change. The graphic below summarizes some of the challenges and how digital financial services can enable change and resolution.

SGD 10

At the Interledger Foundation, our focus in advancing our mission is to support underrepresented groups and vulnerable populations. Our efforts in advancing digital financial inclusion are aligned with the United Nations Sustainable Development Goals (SDG). We build, enable, and maintain a community that embraces digital financial inclusion as an imperative for social change. The ethos of our programs and technology rests on the principles of innovation, openness, and inclusivity.

If you have not done so already, tune into this conversation with ILF’s Chief Program Officer, Chris Lawrence on the Fintech4Good Podcast as he underscores the significance of open source in driving innovation and invites listeners to engage with the foundation's efforts to reimagine digital financial inclusion.

As it seeks to establish a global payments network for inclusive digital financial service providers, the ILF recently launched its Digital Financial Services grant and is now accepting applications for emerging financial services, products, and innovative solutions geared toward benefitting underserved and underrepresented communities.

Read the announcement here:

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