Today, people rely on digital connections more than ever to contribute to the economy, access essential services, and participate in social and political processes. Establishing reliable digital connectivity is a crucial way to foster inclusive development and connect people to economic opportunity. In fact, the World Bank estimates that a 10 percent increase in digital connections leads to a 2.5 percent increase in GDP. However, this connectivity relies on access to digital applications and the necessary physical infrastructure that supports them, and persistent gaps in coverage, usage, and access can prevent people from using the digital services that power modern-day economies. As the world continues to digitize, a priority of sustainable development must be expanding coverage to help establish connections, facilitating people and companies to use those connections, and reducing barriers for people seeking to access the digital services crucial to their lives.
Finnfund, a Finland-based fund manager, is a technology driven impact investor that supports businesses in developing countries access funding to address climate change, drive local economic growth, and facilitate gender equality. Its latest fund directly addresses the problem of digital access by financing the critical infrastructure and solutions across the digital value chain. We had the opportunity to speak with Hanna Loikkanen, Finnfund’s Chief Investment Officer, and Kuutti Kilpeläinen, Finnfund’s Head of Digital Infrastructure and Solutions, who shared valuable insights into the opportunity and value in building the digital infrastructure needed for the 21st century economy.
Current Digital Challenges: Limited Access
In the modern economy, access to digital connectivity and technologies can substantially impact one’s welfare. A key challenge in digital connectivity is the coverage gap, or the inability to access connection through adequate coverage. Over half a billion people still live in areas with no access to mobile broadband services, which are essential for digital inclusion. Significant disparities exist demographically, where women are 37 percent less likely to use mobile internet compared to men, and significant rural-urban gaps continue. Of the estimated 2.6 billion people offline in 2024, 1.8 billion live in rural areas.
Even among those who have coverage, a sizeable usage gap persists, where over 3.5 billion people who live in areas with a mobile broadband network are not using mobile internet. This is despite the substantial increase in mobile broadband coverage since 2014. In part, this may be attributable to technology devices. While four out of five people over 10 years old own a mobile phone worldwide, major differences exist between countries. More than 95 percent of those in high-income economies own a mobile phone compared to just 56 percent in low-income countries.
Another reason over 3 billion people globally do not take advantage of available digital connection is due to affordability. While one striking positive in recent years has been the steady improvement of affordability, the COVID-19 pandemic disrupted this progress as capital needed for digital infrastructure reduced. According to the UN’s International Communication Union (ICU), the cost of a fixed-broadband subscription in low-income countries is the equivalent of nearly a third of the average monthly income. Overall, affordability challenges relate to the cost of the connection, of the data, and of the handsets, which all contribute high cost barriers.
Finally, the access gap exemplifies that even with coverage and with use, the technical ability and access to public and private digital services are crucial for people to use the connection for meaningful purposes. As Hanna Loikkanen told us, digital inclusion is critical for those needing government services. “Users who have unstable income cannot really subscribe on a monthly basis, but they can buy when they need on the fiber network. The infrastructure there is the backbone that needs to be built on the tele-towers, the terrestrial fiber, and the data centers, that ultimately lead to a connection to the digital services, which is critical as governments continue to share more information and services via digital channels.”
The Opportunity: Digitalization Driving Economic Growth
Addressing these digital challenges requires addressing the critical infrastructure that is lacking in many countries. The digital value chain covers a wide range of technically complex and capital demanding needs in the infrastructure that must be in place for the digital applications to work. From data centers, fiber, towers, and operators to the cables and small cells at the point of the user, these differ depending on the market and can exacerbate digital exclusion. As Kuutti Kilpeläinen explained, “fiber penetration is very low across the emerging markets in the Global South. That is both fiber as the backbone infrastructure and also the last mile fiber.” Some densely populated areas in these markets rely on old copper type connections or purely based on mobile connectivity which can be unreliable, slow, and expensive.
Digital solutions have the opportunity to increase productivity and improve access to products and services for residents. As digital infrastructure continues to be built and improved to close coverage, usage, and access gaps, it can facilitate economic growth and inclusive access to financial, education, and health services in developing regions. It can also help connect local small businesses to global value chains. As Kuutti Kilpeläinen said, “the digital sector is the key driver of economic growth. It boosts productivity, fosters innovation, and opens new markets. The digital gap is the digital opportunity in global emerging markets. But in order to be digitally included, you need to have unlimited, reliable, fast internet, which can only be delivered by fiber optic channels.”
An example company that Finnfund works with, Netwey, provides fiber internet in low-income areas in highly populated areas and operate a pay-as-you-go model where people can consume connection on a weekly, monthly, basis which supports more affordable and stronger access that empowers people to work from home, connect with family abroad, or use the digital services they need. Numerous companies across developing regions provide similar services, and need investment to grow their operations and expand their offerings.
Facilitating Finance for Digital Infrastructure
Current investment in digital connectivity varies. Investment in the digital economy is growing fast in recent years, and even in developing economies, average annual FDI flows to the digital economy doubled. However, many low-income countries remain locked out. Infrastructure gaps, high investment risks, and weak regulatory frameworks continue to deter capital, despite the clear benefits it can bring with more dynamic economies and services. As Kuutti Kilpeläinen told us, companies working on the digital infrastructure need growth capital. “There is quite a lot of venture capital money available across emerging markets, as well as some private equity funds. But what is really missing is the growth capital and the growth equity where there is a huge opportunity. We target companies with proven track-records and capable management teams, we can fuel their growth so that in the infrastructure side they become more like a utility, and on the solution side they are more like a platform type of solution.”
Finnfund’s latest fund, the Digital Access Impact Fund, achieved 80 million euro in its first close in August 2025, with a second close targeted at 150 to 200 million euros by mid-2026. The fund will focus on the digital infrastructure and solutions space in sub-Saharan Africa, Asia, and Latin America and specifically target this growth stage where the biggest funding gap exists.
Hanna Loikkanen mentioned the important role that private sector partners can play. “Broadpeak’s experience with private sector investors around the globe has helped our own preparation and how to communicate the potential investment opportunity to private sector investors while addressing their concerns and mitigating risks.” As the digital economy continues to grow, investments in digital infrastructure and technologies will benefit from the immense catch-up potential in frontier markets. Successfully closing the funding gap through additional capital can support regional companies reach profitability, contribute to sustainable development, and spread impact through its wider contributions to the economic growth and digital inclusion. As Kuutti Kilpeläinen concluded, “Finnfund is one of the first investors to have a dedicated team and strategic focus across global emerging markets digital value chain and we see the real opportunity to demonstrate that to the wider investor universe because it’s not something we can solve on our own, but the digital gap is a digital opportunity from both an impact and commercial point of view.”
