A report from the prominent global investment institution Lighthouse Canton reveals that Digital Public Infrastructure (DPI), the foundational digital framework enabling countries to develop digital products and services for their populations, has the potential to close nearly half of the credit gap faced by Micro, Small, and Medium Enterprises (MSMEs) in low and middle-income nations. The use of DPI can also ease credit access for an additional 16-19 million MSMEs in such countries.
The report, aimed at showcasing the outcomes and prospects following the 2023 G20 summit under India’s presidency, further highlights that investing strategically in sectors like open credit, digital retail payments including UPI, and broadening Government-to-Person (G2P) systems, could enhance the GDPs of low and middle-income countries by 1-2%. Additionally, it emphasizes that digital IDs, such as AADHAR, have the potential to unlock economic value equivalent to 3-13% of the GDP in these countries, averaging a 6% improvement.
“Effective deployment of digital public infrastructure (DPI) can address existing digital divides and enable inclusive and sustainable development. As a continually evolving concept and a suite of shared digital systems, DPI can be nurtured and utilised by both the public and private sectors. Since it is founded on open standards and specifications and has secure and resilient infrastructure, all countries, particularly G-20 member nations, can take advantage of DPI in rendering society-wide public services.” said Mr Sumegh Bhatia, Managing Director, and CEO of Lighthouse Canton India.
In the area of climate conservation and environment protection, DPI can accelerate carbon capture by 5-10 years in low and middle-income countries, while also preserving 0.2-0.4 million hectares of unique forest area in these regions.
The report notes that in the evolving global DPI paradigm, India acts as both a case study as well as a harbinger of digital transformation for other G20 nations. The member nations are also keen on leveraging the country’s expertise and proven track record in ensuring services reach the last-mile populace in an efficient and timely manner.
Focusing on India’s banking industry, the report indicates that the adoption of Digital Public Infrastructure (DPI) has dramatically lowered the cost of customer onboarding, from USD 23 to a mere USD 0.1. Additionally, banks utilising e-KYC have seen their compliance costs halved from USD 0.12 to USD 0.06. Furthermore, for some Non-Banking Financial Companies (NBFCs), the adoption of DPI has resulted in an 8% increase in SME lending conversion rates, a 65% decrease in depreciation costs, and a 66% reduction in fraud-related expenses.
Inclusion of the African union
Another key achievement of India’s G20 presidency is the inclusion of the African Union (AU) as a permanent member of the G20. This membership empowers the AU to seek partnerships, acquire knowledge, and facilitate the transfer of technology, thereby accelerating technological advancement in Africa. The G20 Digital Innovation Alliance (G-20-DIA) presents avenues for technological innovation and industry growth. Moreover, the AU’s inclusion in the G20 bolsters its diplomatic relationships and collaborative endeavours with other G20 members and international bodies. This integration sets the stage for joint ventures, addressing Africa’s various challenges, and promoting a sense of unity and collaborative resolution.
The AU now has a platform to champion increased financial assistance and support for African countries, focusing on vital areas such as poverty reduction, healthcare, and infrastructure enhancement. Given the overlap of security issues in Africa with broader global challenges, the AU’s full participation in G20 security discussions enables it to tackle regional conflicts, contribute to counter-terrorism measures, and participate in peacekeeping initiatives more effectively.
The union of nations has also gained the opportunity to engage directly in G-20 discussions about international trade agreements, play a role in forming trade policies that align with Africa’s interests, promote equitable trade practices, and work towards lowering trade barriers. The leaders of the G20 have pledged to maintain open trade and have assigned specific organisations the responsibility of overseeing and reporting on these commitments.
Formation of the global biofuel alliance
During its G-20 Summit presidency, India leveraged the platform to demonstrate its progress and best practices in striving for net-zero emissions. As the presiding nation, India initiated the establishment of the Global Biofuel Alliance (GBA), advocating for the use of sustainable fuels in the worldwide transition to cleaner energy. Reports indicate that the global biofuels market, valued at USD 116.46 billion in 2022, is projected to reach approximately USD 201.21 billion by 2030, experiencing a Compound Annual Growth Rate (CAGR) of 8.3% from 2021 to 2030.
The report sheds light on other key themes that were discussed during the summit such as healthcare equality and digital health projects, with a particular emphasis on the crucial role of women in socio-economic transformation. India’s G-20 presidency has made significant strides in devising strategies to tackle pertinent global challenges. The onus now remains with the global community to embrace the strides made for a more promising and prosperous future for all.