FINANCIAL HEALTH: A BRIDGE OF THE DIVIDE AND WELLS FARGO’S CONTRIBUTION. (SDG 1: NO POVERTY).

 

Know SDG 1: No Poverty

Can humanity ever experience a time when there are not enough individuals to be labelled as “poor”? When each individual is able to fend for themselves without any call of foul means and unruly attitudes by the haves to the have-nots. According to Forbes, this generation has one of the most prolific wealth creation avenues and most individuals who are known to be billionaires today are actually first-generation billionaires. What then are first generation billionaires? These are people who have made their income through various novel methods such as the forex trade craze, NFT (Non-Fungible Tokens) trades, Sports Betting one time jackpot wins among many other creative means made possible only by this generation’s incessant quest for financial freedom and independence at very tender ages. According to the United Nations’ 2021 report on the Sustainable Development Goals, the past decade has witnessed the most unprecedented increase in the number of affluent people across the globe. This they have attributed to the myriad of means available for income earning in current times (UN SDGs Report, 2021). According to the same report, the total number of people living in poverty decreased from 10.1 per cent to 9.3 per cent in the year 2017. These percentages represented roughly a drop from 741 million poor people across the globe to 689 million across the globe.

 

Source: Author’s Construct.

 These gains made in 2017 and leading up to 2018 were however derailed with the occurrence of the global Covid-19 pandemic. The pandemic period and its general halt in global business led to an increase in the poverty rate from 8.4 per cent in 2019 to 9.5 per cent in 2020; representing an increased global poor within the range of 119 million to 124 million people of whom 60 per cent of that make up are from Southern Asia (UN SDGs Report, 2021). All the efforts across board notwithstanding, the United Nations looking at the damage Covid-19 has done and the recuperation period not being a short-term affair also stated in the report that, the quest to achieve total eradication of poverty across the globe by 2030 will not be possible with a projection of 7 per cent global poor making up close to 600 million people still existing by 2030 (UN SDGs Report, 2021).

Source: www.undsdgs.org www.undsdgs.org

For the global poor, the erroneous impression created by many across the globe is that these figures make up the global unemployment rate as a contributory statistic for the people termed the “the global poor”. However, this is not so. According to the same report, it established that the global poor are those that unable to spend more than $1.90 for their daily food intake and meet other needs well. Aside from the already mentioned Southern Asian countries, Africa is also known to have these Least Developed Countries (LDC) which have issues of equality in availability of jobs for women and men which inevitably adds to the global poor index. Among these global poor are individuals who work but are poorly remunerated by virtue of nature of skills held or economic conditions pertaining to said geographical area (Renwick, 2011).

Source: www.wellsfargo.com 

 

Wells Fargo Resolve for Poverty Eradication

As at January 9, 2023, Wells Fargo pegged its personal loans at 7.49% APR (Annual Percentage Rate) for personal loans between $3000 to $100,000. This lending rate for personal loans is currently ranked among the best rates for such loans according to a feature from Forbes.com. This commitment to fighting poverty is also seen in Wells Fargo financial performance for 2021. In Wells Fargo’s financial performance report for the 2021 financial year, they disclosed that, they had been able to accrue a gross revenue of $78.5 billion with a positive variance of $4.2 billion from 2020’s revenue mobilization of $74.3 billion. Likewise, a positive surge in net income for Wells Fargo from $3.4 billion in 2020 to $21.5 billion in 2021. Regardless of this laudable performance, a post-Covid era efficiency ratio of 69% in 2021 against a 78% efficiency in 2020 left much to be desired. Return on shareholders’ equity also shot up from 1.1% in 2020 to 12.0% in 2021. All these massive jumps portray a company whose financials are healthy and thus have a responsibility to give back to the community and ensure that alleviation of poverty is a key focus for the group. And true to this, in the fight to ameliorate the world from poverty, in the same fiscal year, Wells Fargo undertook several non-financial performance roles with the end-game of fighting poverty. The issuing of a $1 billion-dollar Inclusive Communities and Climate Bond were in lieu of contributing to meeting the SDGs and the fight for a better world. The bank also launched a 10- year banking inclusion initiative to help bridge the gap with the unbanked. This they have undertaken with the creation of new savings account solutions which come with less charges as well as easier accessibility to some also new credit and debit cards which can be used with affordable charges. In impacting communities, the Wells Fargo team also purposed a $1 million commitment to Asian American and Pacific Islander communities which is all towards alleviating of poverty through the provision of work and better social amenities (www.wellsfargo.com ).

What then is the role of Wells Fargo in helping close the gap of the world’s poor? In previous pieces on this site, we made mention of the many sustainability projects being undertaken by Wells Fargo [www.rbwellsf.blogspot.com/2023/03/corporate-social-responsibility-and-its.html?m=1]. These projects reach even into Least Developed Countries (LDC) and go a long to aid in alleviating poverty. In trying to increase the spending power of citizens across diverse spectrums, Wells Fargo has introduced more affordable credit cards with lesser charges to ensure accessibility for all and sundry across the globe who make use of Wells Fargo’s different solutions to everyday financial needs of different classes of people. According to Sherratt (2023), the SDG 1 goal of No Poverty is closely related to SDGs 2 (No Hunger), 10 (Reduced Inequalities) and 13 (Climate Change) and where they are all not looked at in a holistic approach, they tend to form a vicious cycle. The context of financial health which this piece preaches and the contribution of Wells Fargo to achieving it are not mutually exclusive. As a Global Systematically Important Financial Institution (G-SIFI), it is the duty of Wells Fargo like all other G-SIFIs to ensure they are able to give back to the global community through these charitable donations and other grants to third world countries among other pertinent cash-strapped endeavors which all culminate in championing the global fight against poverty, the number one goal of the agreed upon SDGs.

In conclusion, the world’s poor continue increase day-in-day-out and the only solutions to these issues are better remuneration coupled with better conditions of service, peace and tranquility in the community, balanced meals among others. For most of these, their proliferation is hinged on a common denominator of financial access which Wells Fargo as a bank is no stranger to. We look forward to a better world where there is financial health and better financial freedom.

 

 

 

 

 

References

Cichos, K. and Salvia, A.L., 2018. Sustainable Development Goal 1. In SDG1–No Poverty (pp. 51-61). Emerald Publishing Limited.

Dornan, P., 2017. Children, poverty and the sustainable development goals. Children & Society, 31(2), pp.157-165.

Garg, C.C. and Karan, A.K., 2005. Health and millennium development goal 1: Reducing out-of-pocket expenditures to reduce income poverty: Evidence from India. Equity in Asia-Pacific Health Systems.

Rassanjani, S., 2018. Ending poverty: Factors that might influence the achievement of Sustainable Development Goals (SDGs) in Indonesia.

Renwick, N., 2011. Millennium Development Goal 1: poverty, hunger and decent work in Southeast Asia. Third World Quarterly, 32(1), pp.65-89.

Sherratt, S., 2023. Ameliorating poverty-related communication and swallowing disabilities: Sustainable Development Goal 1. International Journal of Speech-Language Pathology, pp.1-5.

Shoaf Kozak, R., Lombe, M. and Miller, K., 2012. Global poverty and hunger: An assessment of millennium development goal# 1. Journal of Poverty, 16(4), pp.469-485.

United Nations SDG Report:2021. https://unstats.un.org/sdgs/report/2021/goal-01/. [Accessed on 17^th March, 2023 at 6:03pm GMT]

 

 

 

APPENDIX:

Data from United Nations Sustainable Development Goals Report 2021.

Year	Forecast before COVID-19	COVID-19-baseline projection	COVID-19-downside projection
2015	741
2016	717
2017	689
2018	660
2019	645	645	645
2020	614	733	738
2021 forecast	588	731	751