Digital Finance Plus
Digital Finance Plus aims to understand how digital finance can support innovative solutions to some of the most pressing challenges in development, including:
- Energy: 1.2 billion people do not have electricity in their home, and another 1 billion have unreliable electricity at best
- Water: 663 million people lack access to improved drinking water
- Education: 124 million children between the ages of 6 and 15 are not in school
The growth of digital finance is enabling new business models, financing schemes, and payment mechanisms that, when applied to the delivery of basic services, can help expand access to such services and improve the lives of low-income people.
In the case of energy, for example, pay-as-you-go solar home systems are quickly changing this picture for many low-income households. Customers can finance a solar unit and make small payments on a recurring basis over the course of 12 or more months. Payments can be made by mobile money, and when a payment is made, the unit is automatically unlocked for an established period of time. The use of mobile money reduces the salesforce needed to collect payments and manually unlock systems. And what’s more, companies are now using this digital payment data to establish creditworthiness for other important financial services, such as education savings and loan products.
Tackling the world’s toughest development challenges and meeting the Sustainable Development Goals will require innovative solutions, underpinned by payments and financial services made possible and more effective through the use of digital finance.
Topic Contact: Xavier Faz