Mastercard commits $100M investment to accelerate digital financial services that support economic opportunity in Central America
By Darren Ware, vice president of Government Engagement for Mastercard Latin America and the Caribbean
December 13, 2021
Over the last eighteen months, the world has experienced renowned change favoring a new digital lifestyle that presents both opportunities and challenges in today’s economies across Latin America and the Caribbean. The necessary acceleration in adoption of digital tools by governments and their residents presents a renewed opportunity to work collaboratively across the private sector, governments, and civil society to foster economic opportunity pathways for families and small business owners toward a more financially secure future.
The implications of living in a cash economy and being left out of the formal financial system are vast. Providing more services online is more efficient, safe and creates opportunities for growth and prosperity. Access to a simple, secure digital account is far more than a convenience. It can mean transparency in getting the market price for your crop, an ability to build savings and gain access to credit, or safely receive and access a paycheck.
A Commitment to an Economy for All
That’s why Mastercard committed to bringing 5 million people in El Salvador, Guatemala and Honduras into the formal economy and to digitizing 1 million micro and small businesses following a call this past May to join the Partnership for Central America to accelerate economic opportunities to the Northern Triangle region of Central America. To strengthen our efforts in these markets, this week Mastercard committed to investing $100 million in the region. This investment is intended to drive transformational financial inclusion as we work with the financial industry, government, and ecosystem players to increase transparency and support economic development.
Our efforts also include working with partners such as Walmart to enable access to credit for underserved citizens and with Accion to digitize agricultural value chains and drive stronger financial inclusion for small shareholder farmers in Guatemala, Honduras, and El Salvador.
This is not new territory for us. Last year we reached our five-year goal of bringing 500 million previously unbanked people around the world into the financial system. We then doubled down and committed to bring 1 billion people and 50 million small businesses into the digital economy by 2025 with support for 25 million women entrepreneurs. Our enhanced commitment in the Northern Triangle is an important part of this initiative.
Scalable Solutions to Foster Prosperity
Specifically, we’re advancing technology agendas to bring advanced digital solutions to the Northern Triangle, working with more than 40 ecosystem partners in the region. Our partnerships with banks, fintechs, NGOs and governments in Latin America are already driving progress in the region. For instance, a digital payments program for farmers in southern Mexico shifted coffee growers’ payments to an electronic account, with simple electronic point-of-sale systems set up in more than 200 small shops where the coffee growers purchased their food and supplies. That means no more long trips to the nearest city to cash checks or check-cashing expenses.
Training offered to farmers helps them manage and save their money, reducing earnings lost to intermediaries and increasing transparency between farmers and their buyers. Moving forward, our continued work with more than 20 new financial institutions and fintechs in key markets will be critical in advancing the digital payment ecosystem. In just a few short months, this work has supported more than 35,000 consumers and is projected to help more than 300,000 more consumers in the immediate future. Further evidence that the $100 million investment will help us to accelerate the drive to include 5 million people in the region.
Engendering Public / Private Partnership
Our work in Latin America continues to be a focal point for our financial inclusion efforts, including forging partnerships with governments to accelerate digitization. We are now partnering with many national governments, including Panama and Guatemala to digitize its infrastructure and economy with an aim to accelerate inclusive economic growth in Central America. That includes a focus on remittances and digitization once received in country, digitizing public transit, social benefit payments, tourism, providing access to affordable tools and services for small businesses to grow, and building a digital infrastructure to reach remote communities, helping them secure access to not only financial tools but vital services such as healthcare and education.
Digital technology can and should play a role in today’s recovery efforts. We’ve seen how it empowers the unbanked and underserved to take more control over their financial lives, to improve their livelihoods and accelerate their recovery. And we remain committed to harnessing innovation and technology to create these opportunities to ensure the economic recovery includes everyone. By empowering the people across Latin America and the Caribbean we can also power the local economy.
