Digital Infrastructure Gaps Risk Triggering Poverty

The International Fund for Agricultural Development (IFAD) highlights the risks that the digital infrastructure gap can pose. These conditions could trigger a wave of poverty for millions of rural families around the world.



UMMATIMES - The United Nations agency based in Rome, Italy, revealed a massive increase in migrants sending money via digital transfers during the Covid-19 pandemic. Unfortunately, millions of rural families struggle to access mobile banking services.

Digital transfers are cheaper than traditional cash transfers so they are more in demand. Mobile banking services also provide opportunities for migrants and their families in their home countries to access affordable financial products.

Mobile remittances have increased 65 percent since last year, rising to $12.7 billion. The change was prompted by a lockdown policy that restricted informal channels of remittances.

Despite the global economic recession caused by the pandemic, migrants continue to send money home for their families. Remittances in 2020 reached 540 billion US dollars, only 1.6 percent down from the previous year.

However, in many countries, people living in remote rural areas have little local access to banking services or mobile connectivity. Agencies that offer mobile money services such as cash payments are also limited.

Mobile money service providers are usually only located in the city center. This means that millions of poor rural people have to travel long distances to cities or towns to receive money, often at a significant cost.

IFAD President, Gilbert F Houngbo, called for more investment in digital infrastructure and mobile services in developing countries. The goal, to ensure rural families are not left behind.

"The government and the private sector need to immediately invest in rural digital infrastructure to address this," Houngbo said, quoted from The Cattle Site page, Sunday (20/6).

Since March 2020, IFAD has led the Global Remittance Community Task Force consisting of 41 international organizations, intergovernmental bodies, industry groups and the private sector, as well as a network of diaspora organizations.

The Task Force is developing concrete steps to stimulate digitization in the remittance market. This is an effort to spur the recovery and resilience of migrant families around the world.