Picture: 123RF/RA2 STUDIO
Picture: 123RF/RA2 STUDIO

The coronavirus has changed the world as we know it, with few things left unscathed by the pandemic. The crisis has shone a harsh spotlight on a range of development challenges, and the choices the world makes now, on its path to recovery, will shape the trajectory of sustainable development for years to come.

I was privileged to attend the first Africa Shared Value eSummit this week, at which a key theme was financial inclusion and how the Covid-19 pandemic has paved the way for us to innovate to provide financial services to the most marginalised segments of our society. I firmly believe that financial inclusion can become a key enabler in addressing the impact of Covid-19 in the post-viral recovery period, helping vulnerable households and businesses become more resilient and recover.

With the pandemic triggering a global economic slowdown, leaders have been looking for ways to shore up their countries’ economies, forcing businesses everywhere to make difficult decisions to adapt. The sometimes-difficult decisions leaders have taken to stimulate economic growth will have long-lasting effects. In most cases, relief programmes were designed to keep enough of the economy afloat so that it can climb out of recession rapidly once the lockdowns are lifted.

The pandemic has forever changed the way people work, consume, learn, educate, manage their money and pay their bills. We have seen a definite shift in how and where consumers choose to spend their money, with people gravitating towards digital channels to access products and services.

The full value of e-commerce emerged, as it was possible to fill our fridges and cupboards, as well as medicine cabinets, without leaving our homes. Many of these e-commerce platforms will hopefully continue to flourish long after the lockdown, now that people have experienced their value and the convenience of online shopping.

This triggered a surge towards digital payments and away from cash — which the World Health Organisation flagged as a possible conduit for the spread of the virus. I suspect this migration away from cash payments would have taken longer had it not been for the pandemic.

Covid-19 has driven us all online, delivering in a matter of weeks the digital revolution promised 20 years ago. The pandemic is influencing the urgency and speed with which we have been compelled to embrace many of the tools that will drive and actualise the potential of the fourth industrial revolution (4IR).

Globally, about 1.7-billion adults remain unbanked, while the World Bank estimates that as many as 66% of Sub-Saharan Africans are still unbanked

The entire world — and, indeed, our own country —  was already grappling with the introduction of the 4IR in the broader spheres of society, long before Covid-19 was unexpectedly unleashed on an unsuspecting and less-than-ready world.

Even those who thought of 4IR in terms of artificial intelligence (AI) and their jobs being replaced by robots will emerge from this crisis realising the difference technology has made for the benefit of humanity over the past few months.

One example is the proverbial “business as usual”, which doesn’t exist anymore. There are new ways of working, fast-tracking the implementation of technology to digitalise the workforce, allowing them to work from home. As tech analyst Arthur Goldstuck stated, the coronavirus is an “unavoidable case study of the 4IR in action”.

American author Andrew Keene rightfully observed: “We are surviving through this pandemic because of technology. Everyone is sitting at home, and their window to the world is through their smartphone.”

Yet, while the internet is the answer to many coronavirus lockdown problems, billions of people around the globe still can’t get online. Among the many inequalities exposed by Covid-19, the digital divide is not only one of the starkest, but also among the most overwhelming.

Although three quarters of the population are connected to the mobile internet, 3.7-billion people still can’t get online; most of them are in poorer countries where the need to spread information about how to combat Covid-19 is most urgent.

It is often said that in every crisis lies great opportunity — and this time is no different. The pandemic provides an opportunity to develop and implement long-term solutions to the digital divide in Africa.

The pandemic offers us an unparalleled window of opportunity to accelerate the adoption of digital solutions to drive financial inclusion.

The importance of digital financial inclusion as a tool for economic development is widely known. In Africa, this means not just safer, cashless payments to facilitate social-distancing during the pandemic — but, in the longer term, a shift towards financial inclusion can help get economies back on track faster. It also offers a route out of poverty and is a prerequisite for realising many of the UN’s sustainable development goals.

Globally, about 1.7-billion adults remain unbanked, while the World Bank estimates that as many as 66% of Sub-Saharan Africans are still unbanked. SA has about 11-million people functioning without an account at a financial institution, often through a mobile money provider.

Apart from the digital divide, Unesco says there’s also a significant digital gender divide. Across 10 countries in Africa, Asia and South America, women are 30%-50% less likely than men to use the internet to participate in public life.

To understand why people remain unbanked, the 2017 Global Findex survey asked adults without a bank account why they do not have one. The most common reasons offered were no access to technology and having too little money to justify an account. Cost and distance were also cited, while some said they do not have an account because a family member already has one. Lack of identity documentation and distrust of the financial system were also mentioned, while about 6% cited religious concerns.

Fintech and the future

Fintech has the potential to draw an extra 607-million people into the financial mainstream — and reduce the world’s unbanked population by more than a third.

The relationships being forged between fintechs and banks during Covid-19 are expected to be long-lasting and beneficial for both parties as the entire financial services landscape moves from physical to virtual delivery.

Now more than ever it is imperative that fintech companies and banks work hand-in-hand with governments and regulators so the former can focus on driving economic growth, while the latter provides an environment that fosters innovation and protects customers.

On a continent where so many are still marginalised, the pandemic will indeed accelerate the need for greater financial inclusion and prompt an industry response that fast-tracks the development of digital payment infrastructure. The pandemic has shone a harsh spotlight on a range of development issues. It is clear that governments alone cannot fix the social, environmental and political challenges we are faced with.

Bridging the digital divide and accelerating financial inclusion at home and around the world is key and is going to require new ideas and large-scale investments with impact, far beyond the current capacity of governments.

The private sector has a critical role to make a positive societal impact in a way that reflects where we are in the human journey. Private-sector involvement and private finance, resources and expertise will be required to achieve the UN’s sustainable development goals as the debate around the role of business in society gets louder.

It is increasingly clear that our era will be defined by a fundamental schism: the period before Covid-19 and the new normal that will emerge in the post-viral era.

The path we forge now will be different from the one we had planned, and it’s hard to imagine that we’ll go back to doing things in the same old way when the pandemic is over. This is perhaps just what the 4IR needed to kick-start financial inclusion into gear. Whichever way you look at it — things will never be the same again.

• Mojapelo is head of Absa citizenship and community investments.

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