NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Margaret Miller, Leora Klapper, Ghada Teima & Matthew Gamser

The global economy will likely contract by over 5 percent in 2020 due to the impact of COVID-19, according to the recently released Global Economic Prospects. The deepest global recession in eight decades is sending hundreds of millions into poverty, and recovery appears to be far off. Still, the crisis has encouraged incentives for economic transformation and adoption of digital business models, including increased use of digital financial services (DFS).

Digital financial inclusion was a development priority before the COVID-19 emergency; now, it is indispensable for both short-term relief and as a central element of broad-based, sustainable recovery efforts.  There are challenges to accelerating digital finance, but also, increasingly, an understanding of how to overcome these obstacles and reduce risks.

Photo courtesy of Anna Shvets.