How Mastercard’s corporate philanthropy work spurs financial inclusion

A few years ago, the Mastercard Center for Inclusive Growth started to think about how to use its knowledge to help garment workers in Egypt. Egypt has a massive textile industry, serving some of the world’s largest companies — textiles are the country’s largest exports to the U.S. after fuel. But the workers, mostly women, have traditionally been paid in cash, with all the risks that brings. The money can be lost, stolen, or taken under the control of male family members, and a cash economy makes it harder to keep records and pay bills. Working with Levi’s and an organization called Business for Social Responsibility, the center helped digitize workers’ payroll. And Shamina Singh, founder and president of the center, said the results have been emphatic. “We saw that we could help them digitize, and then do the training and the support and the social impact work around that,” she said. “We saw very quickly that the notion of having a digitized payroll, having a bank account, having a way to purchase that is safe and secure, helps them not only their trust in the system, but their ability to save and earn.” Many other companies have stepped in to follow on from the first pilot, and garment workers across the region now receive their pay electronically and have more confidence in using digital banking services. The center, which was founded in 2014, is a hub within Mastercard, dedicated to using the company’s skills and networks to further financial inclusion. It is a separate initiative from the independent Mastercard Foundation. It administers an impact fund, and has given away more than $260 million in grants so far, but it also researches ways to create greater social inclusion and has pioneered the use of digital technology and data as a way to deliver social good. The Center for Inclusive Growth model involves studying data in-depth and using the insight it gathers to understand where there are opportunities to increase financial inclusion. Then it will pilot interventions that help prove a case, and use the strength of Mastercard’s networks to bring in corporates, financial institutions, funders, and governments to take those interventions to scale. Singh said that one of the core strengths of the center is its integration into the mainstream work of Mastercard. Rather than just drawing on Mastercard’s cash, as with a traditional corporate foundation, it also uses Mastercard’s technology and data expertise, its financial know-how, and its networks and brand. “The genesis of the Center for Inclusive Growth was a recognition that the assets of private sector companies, if marshaled correctly, could have outsized impact in the world,” she said. “And there didn't seem to be a place or a space, certainly in the philanthropic community, that was looking at it in the same way that we decided to look at it. "We need to really understand how we make sure we reduce this information inequality gap, using data science for social impact. Before it gets too far.” --— Shamina Singh, founder and president, Mastercard Center for Inclusive Growth But Singh said that it was not just the center that had benefited. Mastercard also obtained significant benefits from carrying out this kind of engaged corporate philanthropy. “The center has allowed MasterCard to get in front of a lot of the issues that they may be dealing with,” she said. “I don't know that we've necessarily changed what they would do. But I think we've informed what they do and how they might do it. I think we've been a lovely machine inside the company, that's constantly looking at these issues in a very concentrated way, that informs how they do their work.” Mastercard initially set the target of having 500 million people move out of financial exclusion — defined as a lack of access to banking and other basic financial services. This target was hit at the height of the COVID-19 pandemic, which provided powerful incentives to move individuals away from cash and into the digital economy. But there is plenty of scope to continue this work. Right now, according to the World Bank Global Findex report, 24% of adults worldwide — well over a billion people — do not have access to a bank account. Singh said the center has consistently worked on gathering data, trialing new solutions, and then developing them in partnership with others who can commit the resource to scale them up. She said another example was a program to expand access to credit for entrepreneurs in India, which was developed in partnership with the U.S. Agency for International Development, and was part of a package which won an award for excellence from the U.S. Department of State. She said one of the key issues that the sector had worked on was strengthening data usage, which she felt had been a strength of the center. “There is a great divide — we can call it an information inequality divide — between private sector companies who are racing ahead, who understand how to use data to make decisions, and the social sector, which is lagging way, way, way behind in terms of their ability to understand their own data, how to protect their data, and much less how to use it to actually make better decisions. “We need to really understand how we make sure we reduce this information inequality gap, using data science for social impact. Before it gets too far.” Singh said she hopes that other nonprofits, particularly corporate philanthropy organizations, are able to follow a similar model — using not just the money but the core skills and strengths of their private sector to build evidence and data in their core areas, and create pilot models that corporates and governments can follow. “I think because we have looked at philanthropy in that way — as part of a stack, rather than some sort of separate pot of money that is focused on programs, not related to the assets or the abilities of the company — that has allowed us to see around corners,” she said. “And it’s hopefully laid the groundwork for other companies and other philanthropies to model and follow on.”