Female entrepreneurs are on a roll around the globe. They have more opportunity and are making a bigger impact than any previous generation. As reported in The Economist, “The economic empowerment of women across the rich world is one of the most remarkable revolutions of the past 50 years.”
In many ways, now is a golden age for women. But challenges clearly remain. Men still earn nearly 25% more than their female counterparts. When women go looking for financing, they face numerous hurdles. For example, their loans get approved 20% less often than those requested by men. Of the $85 billion that venture capitalists invested in 2017, companies led by women only received 2%.
These constraints create an environment where only 17% of start-ups have at least one female founder. And as women move beyond the start-up phase, things often remain difficult. Research reveals that just 10% of top executives in the United States are women. If you refine the evaluation to only the Standard & Poor’s Composite 1500 stock index, that percentage shrinks to 5%.
So it’s big news whenever prominent businesses, such as Apple and Bank of America, make efforts to promote the role of women. Mastercard has now joined the ranks, with an initiative to connect disadvantaged people worldwide with the established financial system. Data shows that 1.7 billion people across the globe, nearly a quarter of the global population, have no way to use a bank card, which presents a major limitation on their business growth and success.
To remedy these issues and spur business growth, Mastercard pledged to connect 500 million people currently outside the financial system into financial networks by next year.
“Most of these people are women,” says Shamina Singh, president of the Mastercard Center for Inclusive Growth. “They can’t access markets beyond their immediate proximity. There are networks that power the modern economy. They can be financial networks, social networks, energy networks, transportation networks, and your proximity to these networks determines your success. You have to be connected up into these networks in order to realize your full potential.”
These ambitious plans rely on the Mastercard Center for Inclusive Growth partnering with nonprofits and nongovernmental organizations. The nerve center will be Mastercard’s vast financial network, which already circles the globe. Connections are needed in the outposts where Mastercard will be able to impact these hundreds of millions of female entrepreneurs.
One recent example is their $50 million collaboration with the Rockefeller Foundation. Together, they’re addressing what Mastercard refers to as “poverty of access,” using data science to develop user-friendly financial tools for excluded business owners. Most of the recipients are women.
Additional tools have been tailored to women in different parts of the world. As Singh explains, “You have to make considerations that understand what their particular circumstances are like.”
Here are 4 initiatives made possible through multiple organizations working together:
- Improving the way people pay for transportation beyond their immediate neighborhoods, helping women seek educational opportunities and connect with better jobs.
- Creating a “pay as you go” system for small units of electricity. Mastercard developed this system in collaboration with M-Kopa Solar in Africa to make power more affordable to those who need it most.
- Partnering with the Mann Deshi Foundation and the Mann Deshi Bank in India to boost access to financial networks and training to women in rural India.
- Using Mastercard’s transaction data to empower women in Kenya. Partnering with Unilever, the sales data from small businesses is used to create an approximate credit score that can help female entrepreneurs get access to future capital.
It’s important to remember that these fintech tools aren’t handouts. They’re conduits. And they’re changing the way business is done in disadvantaged areas.
“It’s not that (these women business owners) do not know how to do business,” explains Singh. “Of course they know how to do business. They just don’t have access to capital.”
Ultimately, these resources will not only empower female business owners — they’ll reduce the cost of cash. According to Mastercard’s corporate responsibility report, 12.5 million pounds of cotton were used for creating US banknotes in 2017. And it took 112.5 billion liters of water to produce that amount of cotton, which is a hefty environmental impact.
By providing access to new digital solutions, disadvantaged women will also enjoy better transparency and accountability in payments. This insight helps to combat the pay disparity that still exists across all industries.
As more companies like Mastercard participate in these initiatives, better opportunities will continue to arise for women. The future is bright. And as icons of the corporate world continue to step up to the plate, it gets even brighter every day.