Africa is undergoing rapid digital transformation. According to the World Bank, the continent is home to four of the world’s top five fastest growing economies, and as mobile and digital technologies expand, an increasing number of people are now connecting with the tools and networks they need to help them reach their potential, to achieve financial security and advance inclusive growth.
Since embarking on a deliberate journey of financial inclusion in Africa, Mastercard’s efforts have encouraged significant development in various spheres of national economies. As a payment technology company with operations across several countries in Africa, Mastercard’s mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere, by making transactions safe, simple, smart, and accessible. Using secure data and networks, partnerships and passion, Mastercard’s innovations and solutions help individuals, financial institutions, governments, and businesses realize and harness their greatest potential.
Boosting economic empowerment in Africa
Financial inclusion is an integral pillar of Mastercard’s business strategy and part of its vision to create a world beyond cash. Currently, the company is in talks with governments across Africa to expand their digital agenda and look at ways their tools and services can support them.
In essence, digitization has the unique power to drive socioeconomic growth. Statistics show that each one percent increase in usage of electronic payments produces, on average, an annual increase of $104 billion in GDP. Governments and other public and private institutions can therefore look to leverage technology by bringing entire ecosystems online – from mass transit to schools, and from global trade to local supply chains. This will ultimately improve effectiveness, whilst also saving time and costs.
Read also: Mastercard’s Girls4tech programme reaches 1million girls in 30 countries
To this effect, Mastercard has created the SME Omni-channel: SmartPesa, a specialist payments technology for financial institutions in emerging markets. It is a product aimed specifically at SMEs, powered by Mastercard’s payment technology and its Start Path partners.
The unique offering enables business owners to access a wide range of financial services quickly and easily, through a single intuitive app, access a wide range of solutions like such as contactless payment acceptance, ability to generate e-payment links for remote payments and QR code payment acceptance via any Android mobile device. Acquirers can access a white label app to take the solution to market rapidly. The technology is available across Africa, with emphasis on the UAE, Nigeria and South Africa.
Another part of Mastercard’s strategy is to help societies transition from financial inclusion to financial security, thereby not just enabling access to the digital economy, but also providing tools and services to achieve financial security. This includes providing tailored digitization support to the microfinance sector, thus making it possible for micro-merchants to gain access to credit to grow their businesses and create jobs.
An increase in electronic payments has been found to boost national economic growth by reducing friction and increasing the pool of customers. To support this expansion, Mastercard has also partnered with mobile operators across Africa such as MTN Uganda and Vodacom Tanzania to provide Virtual Card Solutions (VCN) that enable safer online purchases locally and internationally, enabling the company to bring their innovations to an entirely new segment of consumers.
Creating shared prosperity through digitization
Five years ago, Mastercard made a long-term commitment to drive safe and scalable financial inclusion in Africa, with the aim of bringing 500 million financially excluded individuals into the digital economy. Now that the goal has been achieved, the company is extending this to a total of one billion individuals by 2025. And it doesn’t end there – the commitment further extends by aiming to help 50 million micro and small merchants (MSMs) and 25 million women entrepreneurs connect to the digital economy.
By using advanced technologies and infrastructure, Mastercard has the ability to scale solutions that support people’s journey from poverty to prosperity. However, this cannot be achieved alone – which is why a complex ecosystem of different players and partnerships with both the private and public sectors is vital to making a sustainable impact across Africa.
Last year, Mastercard announced the signing of public-private partnerships with the International Center for Tropical Agriculture (CIAT), the United States African Development Foundation (USADF) and Rabobank to extend the reach of the Mastercard Farmers Network (MFN) to millions of smallholder farmers in Africa. Under this partnership, key partners, will provide support to further roll out the MFN platform across Uganda making transacting much safer and simpler for many more stakeholders in the agricultural value chain – the farmer, the buyer and the agent.
MFN is an award-winning, innovative solution that helps to connect small-scale farmers with potential buyers, integrates their businesses with payment systems, and enables them to build a digital transaction record that can be used to access formal credit from banks and other financial institutions. Without this technology, many smallholder farmers struggle to access the market for their goods and financial tools that would enable them to grow their businesses and improve their livelihoods.
By fostering fruitful, long-lasting partnerships, not only is Mastercard’s business expanding across Africa, but most importantly, many of the continent’s greatest challenges are also being addressed. This approach is based on the company’s fundamental standpoint of ‘doing well by doing good,’ by creating a sustainable system where everyone can reap the benefits of a financially inclusive society, including citizens, customers, governments and businesses. Any business that hopes to thrive in future has to be built on trust and integrity, and even more so when that business has a direct impact on people’s money and affects the way they live and work.
Empowering MSMEs, growing future skills
In Africa, MSMEs and the informal trading sector are the primary growth engines for the economy, creating approximately 80 percent of total employment. To support small business growth, Mastercard is actively promoting digital platforms and tools which supports their transition to the digital economy.
One of the platforms supporting MSMEs is Mastercard’s partnership with Unilever and Kenya Commercial Bank (KCB) to offer new lending models for micro-merchants in Kenya. The program offers a safe digital platform for enabling KCB to provide an interest-free credit line based on the micro-merchant’s purchasing history. The credit line is provided through a secure Mastercard digital payment solution, which is accessible via mobile phones and other handheld devices. This solution allows micro-merchants to buy more products, giving them access to formal credit services and therefore increasing customer traffic.
Mastercard has also partnered with NetPlus Limited and Innovectives Limited to implement an MSMES self-onboarding digital platform in Nigeria. This has attracted over 1M MSMEs in the last 6 months.
With this initiative, MSMEs can now be exposed to different acceptance frontends and with a strong performance scoring tools to support micro-credits as an incentive to grow and sustain their business in Nigeria.
With work founded in building pathways to financial security, Mastercard’s mission is to increase acceptance opportunities for all, as well as providing MSMEs with other value-added tools and solutions to help businesses grow, thrive and succeed.
However, more still needs to be done if Africa is to realize the full socioeconomic benefits that financial inclusion can deliver, including greater income and social equality, an expanded middle class, and better financial inclusion for all.
About Mastercard
Mastercard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. Our global payments processing network connects consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.
Mastercard Communications Contact
Toju Egbebi, [email protected]
