MasterCard CEO says this global initiative is our generation's big responsibility
Ajay Banga, MasterCard's president and CEO, thinks this is a huge injustice. In his eyes, the responsibility of financial inclusion - that is, the task of creating a truly global economy - rests on our generation's shoulders and requires collaboration across countries, sectors, and industries.
"Other generations have eradicated disease, invented radio and television and the telephone," Banga said at the Mobile World Congress conference in Barcelona on Tuesday, March 3. "The opportunity to drive financial inclusion is unique to us and our time."
But what exactly is financial inclusion, and why does it matter? How has MasterCard helped achieve it, and what has the company learned in the process?
Banga addressed these questions during an "Innovating for Inclusion" keynote, in which he expanded on why financial inclusion is so crucial, what MasterCard is doing to make it a reality, and why partnerships are key.
Financial inclusion means offering low-income developing countries a full range of financial services - savings, payment and transfer services, credit, and insurance - at an affordable, competitive cost. This is a huge undertaking when only 24% of adults in places like Sub-Saharan Africa have a bank account. And it's not just an issue for developing countries: Nearly 70 million Americans and 100 million Western Europeans are also unbanked or underbanked.
The key to achieving it, according to Banga, lies in digital payment programs - but only if there's support from the government. Many programs have failed because they tried to do too much on their own. Local governments must help by creating regulations and citizen identification systems to facilitate financial inclusion more easily and securely.
Banga also described MasterCard's global projects that support the effort of broadening financial services to developing countries. They include the following:
- MasterCard launched HomeSend, a joint venture with eServGlobal and BICS. HomeSend enables consumers to transfer money between mobile money accounts, payments cards, bank accounts, and cash outlets regardless of location or carrier. The company has announced two new programs in Nigeria and Zimbabwe.
- The company has partnered with mobile network operators in Brazil and CAIXA, the second largest public bank, to enable Brazilians to receive their government benefits directly through their mobile phones.
- With a grant from the Bill and Melina Gates Foundation, MasterCard Labs for Financial Inclusion recently launched in Kenya. The program aims to extend financial services for at least 100 million people across East Africa.
- MasterCard and the Egyptian government are working together to roll out a new digital ID program that will enable 54 million Egyptians to link their national ID to the existing national mobile money platform. (100% of Egyptians have some sort of mobile coverage.)
Reaching full financial inclusion isn't going to be easy. But as Banga noted towards the end of his remarks, "We can bend the arc of history towards financial inclusion and a world where more people have the opportunity to enjoy what we take for granted, but it takes all of us working together."
Watch the video below to learn more about financial inclusion.
This post is sponsored by MasterCard.
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