For the last 75 years, globalization has emerged as one of the most powerful forces in human history in alleviating poverty, significantly expanding the middle class, and enhancing prosperity around the world. But, while the benefits of globalization have been significant, they have not always been broadly shared. And while economic growth has been substantial, that growth has not included all.
Tomorrow the G7 will convene to discuss economic inequality. Tackling inequality starts with inclusion. This is true of any of the themes being raised by our global leaders—equal access to opportunity regardless of gender or origins, more fair and equitable economic policies, maximizing the potential of digital technologies.
So how do we level the playing field for all those being left behind?
Four years ago, Mastercard set out to achieve financial inclusion for 500 million unbanked people by 2020. We acknowledge that reaching this goal, however, is the beginning of the journey. We need to do more to help people achieve financial security and realize their full potential in today’s dynamic digital economy.
We have seen how advances in digital technology can be a spark for the well-being of communities and countries. Yet globally, more than a billion people cannot prove their identity, and 1.7 billion adults lack access to any financial services. This isn’t a developed or developing world problem alone.
Bridging the inequality gaps we face today requires us all to think about how technology and innovative partnerships can help people be their most productive, whether they need training, tools, services, access to capital, savings, insurance, or simply connectivity.
We are seeing this come to life in a program we’re piloting with Neumann Kaffee Gruppe (NKG), the world’s largest coffee trader, which has enabled hundreds of smallholder farmers in Latin America to be paid immediately, directly, and digitally. Operating in a digital supply chain, these farmers now have greater visibility into the market and prices, quicker payment options, and more access to financial services. NKG has more insight into its sourcing, boosting the company’s ability to extend credit to farmers going forward so they can safely grow their businesses and save for the future.
This is just one example. We all have an opportunity across the private and public sectors to work together to better understand the needs of the most vulnerable and customize solutions to meet those needs. For Mastercard that means creating opportunities for women in factories to be paid safely and securely for their work. It means unlocking credit for microbusiness owners. It means helping families in the most remote areas easily pay school fees and keep their lights on.
Making the digital economy work for everyone everywhere requires tackling some of society’s most basic problems. For example, identity documentation helps governments establish residents’ rights to national benefits. A well-designed digital identity ecosystem allows institutions to serve the individual with ease and at low cost. Every individual in the world should be the owner of their own identity and should be able to define it, protect it, and use it to advance their goals. This is where we and other entities are looking to add further support.
This isn’t just an issue of philanthropy or corporate social responsibility, as important as those are. This is about businesses achieving commercially sustainable social impact, aligning their business models and products and services with broader social and economic imperatives. This is not at odds with delivering shareholder returns, but the means by which to do so.
This is part of a long-standing commitment at Mastercard to do well by doing good, a sentiment which I believe most CEOs agree with, as the recent statement from my colleagues at the Business Roundtable also demonstrates.
Growth is not sustainable if it is not inclusive. Financial inclusion is just the first step.
Ajay Banga is the president and CEO of Mastercard.
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