How Mastercard’s FinTech And Data Science Increase Opportunities For Women And Cities

How Mastercard’s FinTech And Data Science Increase Opportunities For Women And Cities


Shamina Singh (in black) with Mann Deshi Foundation in IndiaPhoto credit Mastercard

We just swipe or insert our bank cards as a normal course of business, but over 1.7 billion people across the globe can’t – about 23% of everyone on the planet – because they do not have access to the formal financial system. “Most of these people are women,” Shamina Singh, President of the Mastercard Center for Inclusive Growth told me recently, and they “can’t access markets beyond their immediate proximity,” so their lives are severely limited.  Over 80% of the world’s transactions are still done in cash.

“There are networks that power the modern economy. They can be financial networks…social networks, energy networks, transportation networks, and your proximity to these networks determines your success,” Singh explained. “You have to be connected up into these networks in order to realize your full potential,” and for the world economy to grow.

Mastercard made an ambitious commitment to connect 500 million people currently outside the financial system into financial networks by 2020.  To achieve this goal, their Center is partnering with NGO’s and nonprofits to leverage the depth and breadth of Mastercard’s financial networks and infrastructure, which Singh described as addressing “the poverty of access.”  For example, they recently created a $50 million collaboration with the Rockefeller Foundation to leverage data science and develop innovative financial tools that serve the specific needs of those excluded, especially women.

Shamina Singh (centerr) with African Entrepreneur Collective, Gihembe Refugee Camp, Rwanda,Photo credit: Mastercard

FinTech That Works For People’s Daily Lives

“You have to make considerations that understand what their particular circumstances are like,” Singh said, in order to develop solutions that work for them.

Here are a few examples of these high tech and low tech fintech tools:

(a)  A “pay as you go” system for paying for small units of electricity that Mastercard developed being used by M-Kopa Solar in Africa to enable residents to purchase small units of solar power;

(b)  Creating a new Chamber of Commerce in a MC Center partnership with the Mann Deshi Foundation and the Mann Deshi Bank in India (a bank created by local women) to increase rural women’s access to financial networks, training and markets (pictured).

(c) Ways for people to easily pay for transportation to areas outside their immediate neighborhood, so they can access better jobs or educational opportunities, thereby raising their family’s living standards or “economic mobility”; and

(d)  Leveraging Mastercard’s transaction data “for social good,” to improve decision making and access in ways that benefit people, which they call “data philanthropy.”

Singh told me about a MC Center partnership with Unilever to use the Unilever sales data generated by small businesses (many owned by women) in Kenya to “serve as a proxy for a credit score,”  thereby increasing the small businesses’ access to much-needed capital.

“It’s not that (these women business owners) do not know how to do business,” Singh told me, “Of course they know how to do business….They just don’t have access to capital” in the usual way.  This is one of the challenges they are addressing with innovative fintech tools that empower these women, and provide access to a larger network of resources. They call it “doorstep banking.”

U.S. banknotesBrett_Hondow on Pixabay

Reducing the Costs of Cash – Environmental, Social, Legal and Economic

In addition to increasing access to economic growth for individuals, these fintech tools also reduce the costs of cash, which are environmental, social, political and across the economy.  The Mastercard corporate responsibility report states that 12.5 million pounds of cotton were used to make U.S. banknotes in 2017, which required 112.5 billion liters of water to produce that cotton. That’s only one year, and a year when more people used digital payments than ever before.

Digitizing payments to women factory workers, for example (who are usually paid in cash), adds transparency, accountability and efficiency, reducing the likelihood these women will be underpaid, have some of their pay siphoned off by unethical “middlemen,” or that the women will be attacked on their way home for their cash.

Digitizing payments reduces corruption, too, since “criminals still prefer cash.” You’ll recall seeing piles of cash that law enforcement seized during a drug heist, for example.

Singh’s FinTech Strategy Mirrors the “Innovator’s DNA”

In Singh’s discussion about the how the Mastercard Center for Inclusive Growth develops its strategies, I clearly see the Innovator’s DNA model, originally defined by Harvard’s Clayton Christensen:

(a) Questioning, looking for the core needs and what data they need to address those needs;

(b) Networking, through creative partnerships where together their resources create a larger and better impact;

(c) Associating things that had not previously been connected, such as Unilever product sales and credit scores; and

(d) Experimenting with new solutions to find better ways to fulfill the needs.

“This idea of inclusive innovation means innovation without diverse perspectives Is not innovation,” Singh emphasized. “You’ve got to have representative views at the table, otherwise you’re missing something. How do you have true innovation if you’re missing something?”

 





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