Tuesday, 20 October 2020

Mastercard commits $500 million to help close racial wealth gap

In its sustained efforts to build a more inclusive global digital economy, Mastercard is investing $500 million in Black communities over the next five years.

This commitment includes products, services, technology and financial support, as well as concentrated investments that will focus on providing Black-owned businesses and Black people access to affordable financial tools and capital.

"This is a time for action. We have an obligation as a corporate citizen to ensure the digital economy is enabled for all, an obligation to be part of the positive change Black communities so rightly need now," said Ajay Banga, Chief Executive Officer at Mastercard. "We are starting in cities across the country with on-the-ground efforts meant to drive out inequities and create the opportunities, connections and resources that will spark economic growth for the long term."

With half of all Black Americans excluded from the financial mainstream and Black-owned small businesses excluded from funding opportunities, the commitment is designed to foster inclusion by delivering immediate economic benefits, while driving a lasting impact on economic growth for Black communities. Mastercard will focus on three crucial areas:

Expanding City Programs to Support Black Communities.

Mastercard will bring the full range of its assets including partnerships, technology, and data insights to ensure the quick and effective distribution of essential financial support and access to city programs. In collaboration with city leaders, Mastercard is initiating efforts in seven cities including Atlanta, Birmingham, Dayton, Los Angeles, New Orleans, New York City and St. Louis. As part of these activities the company will bring together identification, financial access and payment functionalities in one place through Mastercard City Key, enabling more than 1 million residents with digital access to essential financial tools and support.

Initial projects include:

  • In Atlanta, Mastercard is working with the Office of Equity, Diversity and Inclusion and the Stand-up Atlanta initiative to expand a disbursement program that provides rent relief to avoid evictions.
  • In Los Angeles, Mastercard, the L.A. Mayors Fund and Accelerator for America will expand the Angeleno Card initiative, which has already distributed more than $36 million to help more than 100,000 L.A. residents hardest hit by the pandemic.
  • In New York, Mastercard, the Mayors Fund to Advance New York City and the City itself partnered to disburse aid digitally, as well as enable emergency fundraising. These efforts have reached 24,000 NYC residents through more than 30 community organizations.

City development teams will also have extended access to Mastercard’s Inclusive Growth Toolkit and Recovery Insights platform to help attract valuable investment into predominantly Black—and often overlooked—neighborhoods.

Affordable financial tools and services

Financial products like credit cards or business loans may leave out the unbanked or underbanked—forcing them to use inconvenient and costly payday lending, check cashing and remittance services. Mastercard is working to dramatically reduce the cost and access to financial products for Black families with a collection of digital services being offered first through African American-owned fintech MoCaFi. The digital Mastercard Money Connect Solutions will allow people to send money to relatives affordably; enable real-time bill payment and check deposits by phone; and help people manage wage fluctuations and unexpected bills through earned wage access instead of having to wait until payday.

Capital and resources for Black-owned businesses

Mastercard will expand its relationships with Community Development Financial Institutions (CDFIs), including Accion Opportunity Fund and the Community Reinvestment Fund, to increase capital availability in minority communities. Mastercard has helped direct $250 million in capital flow to Black-owned small businesses in the U.S. since 2018 and is working to triple that amount through this effort. The company is also investing directly in Black- and minority-led startups and expanding its work with Black-owned goods and service providers. Also, in collaboration with the National Urban League, the Mastercard Center for Inclusive Growth is fostering job creation and economic opportunity through the development of Entrepreneurship Centers and Workforce Development Pathways.

Today’s commitment builds on the company's efforts to drive financial inclusion across the globe, leveraging our partnerships across banks, telecommunications providers and fintechs and bringing best practices and learnings across regions.

Over the last five years, Mastercard has brought 500 million unbanked individuals into the global financial system, helping them benefit from the digital economy. Following this success, Mastercard has increased its goal to connect one billion people, 50 million small and medium-sized businesses worldwide to the digital economy by 2025, with support for 25 million women entrepreneurs. This will be achieved through targeted regional programs that identify the specific needs of financially underserved populations, - mobilize assets from across the company and draw on the expertise of the City Possible network and Mastercard Center for Inclusive Growth.

Mastercard’s full commitments to addressing racism are outlined in the company’s ‘In Solidarity: Standing Against Racism and Advancing Equal Opportunity for All’ action plan.

 

Re-disseminated by The Asian Banker

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