Financial inclusion: a key to post-pandemic progress and development in Latin America & Caribbean
Collective efforts within the private sector can drive economic growth in a more efficient, inclusive, sustainable and fair way.
COVID-19 imposed a universal protocol overnight, the same for everyone. Throughout the past few months, under a blanket of equality with which each one of us was forced to adapt and operate from the place we called home, enormous differences appeared. We quickly saw who has, and who doesn't have, access to the technology required to work, socialize and shop online. Now more than ever, it’s clear that we’re on a path to a digitally connected future, so what kind of life will those who are financially excluded have? Perhaps we may have the “Internet of Everything”, but not the “Inclusion of Everyone”.
At Mastercard, we understand that financial inclusion benefits us all, but for some, this still represents a challenge. Because not all people, not all families, not all small businesses or entrepreneurs have access or know how to use financial services. Moreover, financial inclusion is an issue that requires going beyond simply giving payment cards to those underserved by the financial system. We know that well-designed products with high relevance in people's lives can generate high levels of use. A report published by our partner organization Accion, describes how the products that make a real difference are those that were designed to promote financial health – that is, financial stability –, resilience, and equal access to opportunities.
Recognizing the role and collective power of the private sector in financial inclusion, today we announced the union of leaders across financial services and technology to create the “Tech for Good Partnership”, an unprecedented private sector agreement that aims to accelerate digital and financial inclusion in the Latin American region. Partners include banks: Bancolombia, Banco Galicia, Citibanamex and FinTechs: Mercado Libre and PayPal. Our region has a big challenge ahead and the ‘Tech for Good Partnership’ will provide solutions using its member’s collective resources, assets and experience to prioritize digital and financial inclusion efforts in the wake of COVID-19.
For Mastercard, financial inclusion has always been a shared responsibility across countries, sectors and industries. Advancing financial inclusion is not something that should be done; it is something that must be done. Worldwide, there are still 3 billion people outside the formal economy. They are the ones who use cash when managing house expenses, saving for a rainy day, or paying for their children's schooling. In fact, 80% of the commercial transactions that take place in Latin America and the Caribbean are made in cash.
We know the importance of financial inclusion and it is the great enabler of 8 of the 17 sustainable development goals proposed by the UN for 2030. On a purely operational level, it involves access to formal financial services for everyone, regardless of their purchasing power or where they live. But, in its deepest implications, it contributes to eradicating poverty, guaranteeing health and food for all, ending inequality, promoting employment and industry, and is a guarantee of independence, among other important goals, for women entrepreneurs.
At Mastercard we are convinced that we can only thrive as a business if local economies and people also prosper. “Doing Well by Doing Good” is not an empty slogan, but a true business philosophy; and partnerships such as the “Tech for Good Partnership” represent a powerful commitment that will keep us united on the path to post-pandemic recovery.