The United Nations has a PR problem in the private sector. Many corporate leaders view the U.N. as an unwieldy bureaucracy unrelated to their bottom line. Donald Trump agrees. What, then can the U.N. behemoth offer industry sectors prizing efficiency and innovation? In fact, there is more than you might think bridging the gap between firms maximizing shareholder value and multilateral organizations seeking global peace and social progress. The U.N. already shapes standards for responsible business practices through initiatives like the U.N. Global Compact. But companies can go beyond mere compliance and collaborate with the U.N. to drive growth and enhance profitability, especially in untapped emerging markets.
Developing markets like Africa’s offer business prospects for the private sector while benefitting the U.N.’s most vulnerable stakeholders. Building financial infrastructure is a prime example of such opportunities. Approximately 90% of all financial transactions in Africa are conducted using cash and coins, and almost half of the continent’s population is unbanked, according to African Business. Informal cash-based economies often hinder economic growth, enable corruption, and reduce tax revenue. Digital financial services can drive economic growth by incorporating more participants in the economy.
In Africa, where the World Bank reports over 650 million mobile phone users, 75% of all online traffic in Africa is on mobile devices. Digital accounts cost 90% less than conventional banks, enabling businesses to reach more customers and reap greater profits. Countries like Kenya have been early adopters of digital banking. 59% of Kenya’s GDP flows through Safaricom’s M-Pesa, the fintech market leader with over 50 million customers. Kenya’s widespread use of digital financial services helped lift around 1 million people out of extreme poverty between 2008 and 2014. With Africa’s population expected to explode to over 4.2 billion by 2100 — meaning 1 in 3 people on this planet will be African — numerous other opportunities abound. Indeed, with 1.4 billion unbanked people globally, there’s significant potential for global growth.
While private fintech entrepreneurs like M-Pesa lead this digital transformation, the U.N.’s policies can offer basic support: access to electricity, improved connectivity infrastructure, and secure Digital ID systems. Agencies like the U.N. Development Programme and U.N. Capital Development Fund work with governments to develop policies that encourage the growth of digital banking. UNCDF collaborates with central banks, financial institutions, and fintech firms to strengthen digital financial infrastructure and provide training and resources to local stakeholders. Between 2015 and 2019, UNCDF partnered with the MasterCard Foundation on a digital finance program in Benin, Senegal, and Zambia. Benin’s digital financial services usage rate jumped from 2% to 40%, while Senegal’s from 13% to 29%, and Zambia’s from 4% to 44%. The agency also provides grants, loans, and investment capital to fintech and digital banking startups serving underbanked populations in Africa; their pilot programs for scaling fintech innovations have also catalyzed digital markets on the continent.
The U.N. facilitates many other public-private partnerships between governments and fintech or telecom companies. The Better Than Cash Alliance, consisting of over 80 governments, companies, and international organizations, accelerates the transition from cash to digital via advisory services, research sharing, and advocacy. Partnerships with mobile networks have helped expand platforms like M-Pesa in Kenya. And the UNDP is actively involved in the digital transformation of banks, partnering last year with Visa in Somalia to promote digital financial services for Somali enterprises. Other projects include the expansion of Somalia’s digital national ID project and additional public services.
Collaborating with the United Nations to enhance Africa’s financial transaction infrastructure exemplifies how businesses can partner with this multilateral organization to develop emerging markets, creating profitable opportunities while simultaneously alleviating poverty for millions. Undoubtedly, a wealth of promising opportunities exists far beyond Africa’s borders, offering potential for both social impact and economic prosperity. These diverse prospects can simultaneously address human needs while generating meaningful financial returns.