FINANCIAL TECHNOLOGIES ESSENTIAL FOR SUSTAINABLE DEVElOPMENT -REPORT

Financial technologies essential for sustainable development – Report
By BUUMBA CHIMBULU
FINANCIAL technologies (Fintechs) could make bold social and environmental contributions in developing countries if new governance models are adopted, according to a study.
United Nations Development Programme (UNDP) and United Nations Capital Development Fund (UNCDF) in the new study “A principles-based approach to the governance of BigFintech” Bold governance mechanisms are required to secure BigFintechs contributions to the Sustainable Development.
The study calls for a much more ambitious and convergent approach across regulatory domains, highlighting five principles upon which policy makers, regulators and BigFintechs can build a governance aligned with sustainable development.
The Principles promote collaboration between regulators from different domains and markets, more corporate accountability, proper enforcement and oversight as well as greater overall commitment to sustainable development.
“Amazon’s decisions affect 1.6 million active sellers worldwide, of which 300,000+ are in developing countries and 850,000 rely on this BigFintech as their sole source of income.
“The recent outages faced by Meta (Facebook and its social media platforms) affected more than our ability to chat: millions rely on these social commerce platforms for their income and livelihoods,” the report stated.
According to the report, positive impacts included deepening financial inclusion and digital livelihoods.
It however indicated that these could be overshadowed by negative outcomes ranging from tax base erosion to crowding out local SMEs, worsening work conditions for digital workers, negative environmental impacts, widening inequalities, and negative impacts on macroeconomic and monetary policies.
“For instance, ride-hailing services such as Uber, Grab and Careem support financial inclusion and create many local jobs in developing economies, but they also contribute to 69 percent more pollution and poor working conditions.
“By 2030 e-commerce, while supporting SME growth, will likely be responsible for a 36 percent increase in delivery vehicles on the road and a 30 percent increase in greenhouse gas emissions,” the report stated.