PATHFINDER INITIATIVES

The Task Force catalysed action. These pathfinder initiatives, developed through and with the Task Force, exemplify how to realize the catalytic opportunities and build sustainable digital financing ecosystems.

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Bangladesh: Catalysing Local Sustainable Infrastructure Investment

This Pathfinder Initiative was initiated by the Task Force with support from UNDP and UNCDF.

Bangladesh is exploring how to harness digitalization to channel domestic micro-savings into investments in sustainable infrastructure, and then use blockchain to improve the effectiveness and accountability in the use of funds. Domestic savers could choose SDG projects from which they would benefit, the approach could deliver significant reductions in the cost of capital, and economic multiplier effects as dividends flow to poorer Bangladeshi citizens.

 

Bangladesh Pathfinder Concept

Domestic savers would be able to choose which SDG project they want to invest in, such as particular roads or bridges, sanitation systems or hospitals, giving them the benefit of investing in improvements to their area, which will also pay back in savings of time and money, and improved standard of living. Pooled savings would then be used to finance much-needed SDG-related projects that generate dividend. Investments in local infrastructure will also need to overcome challenges of corruption and lack of trust. Technology solutions such as blockchain, together with public transparency offer the potential to improve effectiveness and accountability in the use of funds.

The potential gains for Bangladesh are significant, as they could be elsewhere. Bangladesh needs to invest an estimated US$67 billion a year in various projects to meet its sustainable development goals, with about half of current financing coming from international sources. International finance is already costly compared to domestic capital, with its relative costs projected to increase as Bangladesh moves to middle income status and loses access to concessionary finance. The envisaged approach would reduce the need for international borrowing, improving the country’s investor rating. The dividends would be returned to Bangladeshi citizens with associated equity and economic multiplier effects.

How does this pathfinder initiative exemplify the Task Force’s recommendations? 

SDGs Link to analysis and recommendations
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  • Empowers citizens to invest in sustainable infrastructure
  • Aggregates micro-savings into investable capital at low cost
  • Enables long-term finance and ensures retail investor liquidity through product innovations
SDGs
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Link to analysis and recommendations
  • Empowers citizens to invest in sustainable infrastructure
  • Aggregates micro-savings into investable capital at low cost
  • Enables long-term finance and ensures retail investor liquidity through product innovations
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Zimbabwe: Growth Enterprises Market SME Listing Platform

This Pathfinder Initiative was initiated by EcoCash, whose CEO is a Task Force member, with contributions from the New York based stock exchange, IEX, whose CEO is also a member of the Task Force, and UNCDF.

Zimbabwe’s leading payments platform, EcoCash, has designed and piloted a world-first stock exchange that draws on payments data to provide robust due diligence and credit ratings for prospective listings. It provides a much needed debt and equity financing window for Zimbabwean SMEs operating in difficult economic conditions.

To date around 300 companies, including federated groups in agriculture, have been preselected for due diligence towards listing and over two dozen have been successfully listed to date.

How does this pathfinder initiative exemplify the Task Force’s recommendations? 

SDGs Link to analysis and recommendations
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  • Empowers citizens to invest in local businesses
  • Unlocks financing to SMEs through innovative, data-driven products
  • Deepens digital financing ecosystem in Zimbabw
SDGs
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Link to analysis and recommendations
  • Empowers citizens to invest in local businesses
  • Unlocks financing to SMEs through innovative, data-driven products
  • Deepens digital financing ecosystem in Zimbabw

 

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Global: Digital Governance of Infrastructure

Refinitiv, one of the Task Force’s key knowledge partners, is taking forward a Digital Governance of Infrastructure initiative ‘Infrastructure 360’. 

This initiative is a response to the unprecedented growth and demand of new international infrastructure development programmes across the world.

It provides trusted information and insight on over 60,000 projects globally, integrating 25 years of data on project finance, deals, loans, due diligence, risk profiles and macroeconomic, geopolitical and operational risk with ESG metrics.

This initiative includes projects on solar, wind, ports, airports, roads, and railroads as well as logistics, tourism, retail and real estate to help investors, governments and citizens make sustainable investment decisions.

Refinitiv Mapping of Infrastructure Projects

How does this pathfinder initiative exemplify the Task Force’s recommendations? 

SDGs Link to analysis and recommendations.
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  • Empowers citizens and intermediaries to track infrastructure project risks and performance
  • Intends to augment standard market data from digitally-enabled alternative sources of SDG-related data
SDGs
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Link to analysis and recommendations.
  • Empowers citizens and intermediaries to track infrastructure project risks and performance
  • Intends to augment standard market data from digitally-enabled alternative sources of SDG-related data

 

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The Gambia: Accelerate Digital Financial Inclusion

The initiative is driven by Task Force members EcoCash, UN Women and GSMA with support from UNCDF.

The Gambia pathfinder initiative is focused on advancing financial inclusion by ensuring a supportive policy environment and promoting private sector investment in digital infrastructure and citizen-centric, innovative digital financing products and services.

How does this pathfinder initiative exemplify the Task Force’s recommendations? 

SDGs Link to analysis and recommendations
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  • Improves citizens’ access and capability to use digital financial services.
  • Accelerates digital financing ecosystem development.
  • Supports market innovators to develop products aligned to national SDG goals.
SDGs
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Link to analysis and recommendations
  • Improves citizens’ access and capability to use digital financial services.
  • Accelerates digital financing ecosystem development.
  • Supports market innovators to develop products aligned to national SDG goals.

 

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East Africa: Regional Digital Financing Ecosystem

Digitalization drives increasing returns to scale, which in turn requires access to larger markets. Building local demand and encouraging widespread adoption of digital financing by users and incumbent financial sector players may require either deepening of domestic markets or a regional approach. For example, the Central Bank of Kenya is working to foster a regional digital financing ecosystem.

The Central Bank has also promoted international cooperation and established strong ties with MAS, the Monetary Authority of Singapore, to advance Singapore-East Africa cooperation. In July 2019, the Central Bank of Kenya and and MAS, organised  a first-of-its-kind ‘Fintech in Savannah’ Afro-Asia Fintech Festival. This year, a Virtual Africa Hackathon will be held on 31 August in Nairobi, Kenya.

 

How does this pathfinder initiative exemplify the Task Force’s recommendations? 

SDGs Link to analysis and recommendations
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  • Expands digital financing ecosystem regionally.
  • Promotes regional and international cooperation and governance.
  • Strengthens citizen and innovator capabilities.
SDGs
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Link to analysis and recommendations
  • Expands digital financing ecosystem regionally.
  • Promotes regional and international cooperation and governance.
  • Strengthens citizen and innovator capabilities.

 

 

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Sustainable Digital Finance Measurement Framework

This pathfinder initiative has been developed by the Green Digital Finance Alliance (GDFA), one of the Task Force knowledge partners.

The Sustainable Digital Finance Measurement Framework assesses three key elements of sustainable digital financing ecosystems:

  1. digital and data infrastructure
  2. policy and regulatory guidance
  3. applications that unlock financing for SDGs at national level.

The Framework is modular and can integrated into existing planning tools and frameworks. Information gathered helps shape policy and regulatory design aimed at aligning digital finance with national SDG priorities and generate knowledge around sustainable digital finance practices.

The framework has so far been trialed in Germany, Spain and  The Netherlands.
Germany Report Cover   Spain Report Cover   Netherlands report cover

 

Sustainable Digital Finance Ecosystem – Germany

 

How does this pathfinder initiative exemplify the Task Force’s recommendations? 

SDGs Link to analysis and recommendations
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  • Tracks the development of digital infrastructure, policy / regulatory frameworks, digital financing ecosystem.
  • Integrates SDG considerations into digital financing ecosystem assessment.
  • Assesses alignment of digital financing applications with national SDG strategies.
SDGs
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Link to analysis and recommendations
  • Tracks the development of digital infrastructure, policy / regulatory frameworks, digital financing ecosystem.
  • Integrates SDG considerations into digital financing ecosystem assessment.
  • Assesses alignment of digital financing applications with national SDG strategies.

 

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Dialogue on Global Digital Finance

The initiative is co-chaired by the Governor of Central Bank of Kenya and the UNDP Administrator and is hosted by UNDP and UNCDF.

A pathfinder initiative has been launched under the leadership of Kenya and Switzerland. The Dialogue on Global Digital Finance seeks to facilitate a balanced and more inclusive dialogue, particularly involving developing nations, on SDG-aligned governance of global digital finance platforms.

It will convene representatives from central banks, finance, trade and other relevant ministries, cross-sector regulatory bodies, LDCs and non-state actors from developing countries, and representatives from key institutions such as FSB, BIS, IMF, World Bank and Global Partnership for Financial Inclusion affiliated entities.

A complementary initiative, the platform will provide a means for advancing consensus on policy and regulatory responses to the development of global digital financing platforms appropriate for developing contexts and economies. It will also seek to catalyse governance innovations that improve consideration of the SDGs, and will explore ideas and potential for collective action by developing countries to harness digital finance in leapfrogging toward sustainable development.

The first expert roundtable of the International Dialogue on Global Digital Finance was held on 18 May, 2010.

How does this pathfinder initiative exemplify the Task Force’s recommendations? 

SDGs Link to analysis and recommendations.
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  • Establishes inclusive space of international cooperation
  • Integrates SDG considerations into policy and regulatory debates about global digital finance with significant cross-border spill-over effects
SDGs
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Link to analysis and recommendations.
  • Establishes inclusive space of international cooperation
  • Integrates SDG considerations into policy and regulatory debates about global digital finance with significant cross-border spill-over effects