## Bridging the Digital Divide to Scale Up the COVID-19 Recovery

_IMF Blog, November 5, 2020_

## Source details

**Canonical URL:** [Bridging the Digital Divide to Scale Up the COVID-19 Recovery](https://www.imf.org/en/blogs/articles/2020/11/05/blog-bridging-digital-divide-to-scale-up-covid19-recovery)

## Other formats

- [Markdown version](/en/blogs/articles/2020/11/05/blog-bridging-digital-divide-to-scale-up-covid19-recovery/index.md)
- [Structured JSON version](/en/blogs/articles/2020/11/05/blog-bridging-digital-divide-to-scale-up-covid19-recovery/index.json)
- [Bundle manifest](/en/blogs/articles/2020/11/05/blog-bridging-digital-divide-to-scale-up-covid19-recovery/bundle-manifest.json)

## Bibliographic details
- Authors: Patrick Njoroge, Ceyla Pazarbasioglu
- Published: November 5, 2020

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### Digitalization during COVID-19: overview and examples
- Digitalization enabled many developing countries to leapfrog on financial inclusion; examples cited include Kenya, Ghana, Rwanda and Tanzania.
- Pandemic-driven adoption: online shopping, entertainment, digital financial services, virtual meetings and events became central to lives and livelihoods globally.
- Central bank and private-sector actions:
  - Central Bank of Kenya waived charges and expanded the limit for low-value mobile money transactions, resulting in more than 1.6 million additional customers and a significant increase in both value and number of transactions, mostly of $10 or less.
  - In Rwanda, all charges were waived in March; by the end of April 2020, the weekly value of all kinds of mobile money transactions increased by 450 percent from pre-pandemic levels.
  - In China, Ant Group partnered with more than 100 banks to launch the Contactless Loans initiative to help small and medium enterprises recover from COVID-19.
  - In Brazil, the central bank is launching PIX, an instant-payments system expected to become widely available this month.
  - In India, Riskcovry, a Mumbai-based start-up, introduced a coronavirus insurance policy for businesses to offer employees hospitalization and lost-wages coverage.

### How digitalization can help: three recommendations
- Place people at the center of the global financial system.
  - Digitalization must be driven by the needs of the people and work for them.
  - Example: Kenya’s 2017 mobile-based digital bond M‑Akiba mobilized micro-savings of as little as $30 to finance government; 85 percent of investors were participating in the government securities market for the first time.
- Connect citizens to mitigate the digital divide.
  - Over 700 million people lack broadband connectivity.
  - Over a billion lack formal identification.
  - Policy implication: invest in digital infrastructure and digital identity so citizens can access online services; invest in numeracy and financial literacy.
  - International co-operation will be needed; the International Monetary Fund, World Bank and other international organizations are working with the private and public sectors globally to help countries.
- Strengthen governance of global digital financial platforms.
  - Big Techs are transforming delivery of services globally, a trend accelerated by COVID-19.
  - Concern: developing countries have not been at the table when governance of these platforms is discussed.
  - Initiative: the Task Force’s Dialogue on Global Digital Finance Governance seeks to facilitate a balanced and more inclusive dialogue, particularly involving developing nations, on aligning Big Tech governance to the Sustainable Development Goals.

### Risks and policy priorities moving forward
- Main risks to address:
  - Cybersecurity.
  - Data privacy and security—greatest threats to vulnerable citizens using digital services for the first time.
- Policy priority: mitigate these risks to protect citizens’ information and hard-earned money.
- Cross-sector call to action: Governments, the private sector, international organizations and citizens must cooperate to increase digitalization and seize the pandemic-driven opportunity to enhance lives and livelihoods.

*Patrick Njoroge, Ceyla Pazarbasioglu — November 5, 2020*

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## Content in this bundle

- **Review of Emergency Measures to Facilitate Mobile Money Transactions**
  - [Review of Emergency Measures to Facilitate Mobile Money Transactions (Markdown version)](/uploads/press_releases/913082204_Press%20Release%20-%20Review%20of%20Emergency%20Measures%20-%20Mobile%20Money%20Transactions.pdf.md){rel="alternate" type="text/markdown"}
  - [Review of Emergency Measures to Facilitate Mobile Money Transactions (PDF)](/uploads/press_releases/913082204_Press%20Release%20-%20Review%20of%20Emergency%20Measures%20-%20Mobile%20Money%20Transactions.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/blogs/articles/2020/11/05/blog-bridging-digital-divide-to-scale-up-covid19-recovery_