Finance, supported by emerging technologies like artificial intelligence, blockchain, and decentralized finance, is a powerful tool for reducing poverty, according to a Singaporean finance expert.
Daniel Rabetti, an Assistant Professor of Accounting and Finance at the National University of Singapore, made these remarks ahead of this year's G20 Summit.
Rabetti emphasized the critical role of finance in alleviating poverty and the potential of emerging technologies to empower underserved populations.
"The Brazilian President Luiz Inacio Lula da Silva has already anticipated that combating poverty and financial inclusion is one of the main goals of the G20 Summit happening in Brazil. There is no doubt that finance is crucial in reducing poverty, especially with emerging technologies, such as artificial intelligence, blockchain, and the decentralized finance. For instance, AI-driven credit scoring enables micro-finance institutions to access creditworthiness even for individuals without formal banking history, extending loans to those previously excluded from the financial banking systems. This access allows low-income communities to invest in education, healthcare, and businesses, breaking the cycle of poverty," said Rabetti.
Rabetti also called for more investment in social programs for poverty reduction, as social impact investing and public-private partnerships direct private capital towards projects that offer both financial returns and social benefits.
"Additionally, social impact investing directs private capital towards projects that deliver financial returns and social benefits, such as affordable housing or healthcare and infrastructure. Public-private partnerships enhances efforts by combining government funding with the private sector efficiency to tackle infrastructure and food security challenges, which is also part of the G20 Summit agenda," Rabetti said.
Rabetti highlighted the role of development and social bonds in structured funding for poverty alleviation, saying it can provide funds targeting specific needs in areas like schools and hospitals.
"Last but not least, development and social bonds provided structure funding for poverty alleviation, targeted specific needs in schools and hospitals, for instance, when it is strategically applied and enhanced by technologies like artificial intelligence, blockchain, the decentralized finance. Finance becomes a powerful driver of social change and sustainable development," said Rabetti.
The 19th G20 Summit is scheduled for Nov 18 to 19 in Rio de Janeiro, Brazil, under the theme of "building a just world and a sustainable planet."
Created in 1999, the G20 is a main forum for international cooperation on financial and economic issues. It comprises the European Union, the African Union and 19 countries, including China and Brazil.
Tech-savvy finance instrumental to poverty alleviation: finance expert
