What Does Financial Inclusion Have to Do with the Sustainable Development Goals?

Why my passion for international development led me to work in digital finance

By Kathleen Yaworsky

Working in Bolivia with my Accion team

People who know me are often surprised to learn I work in “finance”—digital finance, no less. Yet I don’t consider myself “a tech person.” I consider myself “a development person.”

I studied international affairs in college, and I joined the Peace Corps after graduation. In Ukraine, I taught English and directed a national girls’ leadership program. I also facilitated trainings on human trafficking, HIV/AIDs, and domestic violence awareness and prevention. I saw firsthand how education could provide a path to prosperity and how promoting gender equality could advance inclusive growth and social justice.

When I returned to the U.S., I started working for a nonprofit whose mission was to provide clean water and sanitation to communities in sub-Saharan Africa. The common denominator between my work in Ukraine and my work in sub-Saharan Africa was female empowerment. When women and girls spend eight hours a day walking for water, the economic and educational opportunity costs are huge—the ripple effects of clean water extend far beyond health and nutrition.

Working to provide clean water and sanitation to communities in sub-Saharan Africa

Throughout my early work in international development, I remained frustrated by the small scale and slow pace of change. At each inflection point in my career, the question I continued to ask myself was: how can I have the biggest impact on the most people? In other words, how do we make development more sustainable?  In a world with no shortage of problems, what is the most important one to solve?

On a larger scale, these are some of the questions the United Nations works to answer with their Sustainable Development Goals (SDGs). The United Nations hopes these 17 interrelated goals will free the world from poverty, protect the planet, and ensure peace and prosperity for all. This plan may seem too ambitious, but building a better world requires a bold vision and hard work.

In my own career, I had worked on many of the SDGs, including clean water, quality education, and gender equality. But the question of how to achieve impact at scale remained. In focusing primarily on outcomes, I realized I had overlooked an enabling infrastructure critical to sustainable solutions: the financial system. Financial inclusion is, after all, not a goal in itself but the means to many ends. As my colleague Sonja put it, “financial inclusion is an enabler of the SDGs.”

I’m now proud to be a part of Accion’s Global Advisory Solutions team, which partners with financial service providers (FSPs) around the globe to better meet the financial needs of underserved individuals and small businesses. In this role, I’ve been able to see just how crucial financial inclusion is to achieving the SDGs.

CGAP breaks it down well:

The financial system is, in a sense, the nerve system of an economy. It is the platform used for market transactions to occur, the means by which governments distribute benefits, and the mechanism used by citizens to demonstrate their civic responsibilities by payment of taxes and government services. Ensuring the financial system is inclusive is paramount in the process of creating a more inclusive, equal and peaceful society.

Digital finance and fintech innovations enable us to promote financial inclusion more effectively, making the SDGs more achievable. The “digital” layer is another tool—the means to an end—not a solution in and of itself. But it enables services to be delivered efficiently at scale with widespread benefits.

This digital infrastructure is powered by data. As I wrote in American Banker, “Unlocking the promise of big data to promote financial inclusion will expedite the ability of businesses to provide high-quality financial services to billions of new customers.”

While we must still consider the risks and ethical dilemmas as we push beyond the bounds of traditional [micro]-finance, the power of digital finance to help us achieve a more equitable world is becoming increasing clear. If we want to achieve the United Nations’ SDGs, we can’t overlook the importance of financial inclusion.

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