WASHINGTON/ACCESSWIRE/November 10, 2022/ The Mastercard Center for Inclusive Growth
Small business owners in emerging economies face multiple challenging circumstances, from rising prices and high import costs to new hurdles posed by climate disasters. As the global economy continues to go digital, a new report from global nonprofit Accion and the Mastercard Center for Inclusive Growth shows what small businesses and their customers can gain from digitalization and shows how digital tools designed for small businesses can advance economic inclusion.
The report presents lessons from a four-year program, launched in 2019 and continuing during the global COVID-19 pandemic, in which Accion, supported by the Mastercard Center for Inclusive Growth, worked with nine financial services providers and 50 fintech startups around the world. to help small businesses take advantage of digital tools. The results demonstrate the importance of accelerating the digital transformation of small businesses, which represent 90% of businesses worldwide and create seven out of 10 jobs in emerging markets.
Over a four-year period:
Digital adoption has increased among female entrepreneurs. Women accounted for 75% of new product users, demonstrating the potential of digital tools to expand access to financial services for women and other underserved people.
Financial health has improved. Nearly 80% of product users surveyed in five countries reported increased ability to manage financial hardship, including the ability to repay loans on time or access credit for business needs, which they attribute products developed by the partnership.
Digital tools have boosted productivity and growth. Digital product users reported a 30% increase in business growth activities, with more than 61% linking these improvements, at least in part, to the digital products used.
The 30-day use of digital tools by unique users increased by 400%, showing that people were not only accessing the tools, but using them regularly. The tools included products designed to support financial literacy, digital savings and short-term loans for underserved businesses.
At the end of the program, the report reveals that more than 11.5 million people have benefited from digital transformation, including more than 4.4 million micro and small businesses that now regularly use digital tools. From April 2021 to April 2022, the number of active digital users (active year-over-year) grew by more than 1.1 million across all program partners, with 800,000 added in the past six months alone.
Michael Schlein, President and CEO of Accion, said, “Small businesses are the backbone of local communities, and the rapid digitalization of the economy offers new opportunities to provide them with more financial services and better quality. We have shown that when financial service providers and fintechs design digital products and services that meet the needs of micro and small businesses and their customers, people will use them. We are excited about the potential of these products to improve the financial well-being and resilience of millions of people around the world.
“Our work with Accion shows that digital financial tools can be a game-changer for small businesses and the people around the world who run them,” said Shamina Singh, Founder and President, Mastercard Center for Inclusive Growth. “The positive impact we’ve seen when women business owners embrace digitalization is particularly encouraging, and we hope to further enable this trend as our partnership progresses. This program not only confirms early learnings about the potential of digital economy to empower successful small businesses, but it provides an evidence base on the opportunity we have right now to unlock the financial health of the underserved through digital tools and services.”
In addition to addressing the digital transformation of financial service providers focused on micro and small businesses, the program provided support to fintechs serving micro and small businesses globally, offered COVID-19 resources for small businesses to United States and has conducted research on micro and small enterprises. impacts of the pandemic on small businesses. As movement restrictions were lifted, the program focused on long-term digital transformation strategies to connect underserved people to new economic opportunities.
Experts from Accion, Mastercard and financial institutions at the forefront of digital transformation will discuss the report’s findings, lessons learned and best practices for the future at the Digital Transformation Forum in London on November 15, available in right here.
Accion is a global non-profit organization committed to creating a financially inclusive world, with a pioneering heritage in microfinance and fintech impact investing. We catalyze financial service providers to deliver affordable, high-quality solutions at scale for the 1.8 billion people who are excluded – or underserved – from the financial sector. For more than 60 years, Accion has helped tens of millions of people through its work with more than 200 partners in 63 countries. More at accion.org.
About the Mastercard Center for Inclusive Growth
The Mastercard Center for Inclusive Growth advances equitable and sustainable economic growth and financial inclusion around the world. The center draws on the company’s assets and core competencies, including data insights, expertise and technology, while administering the Mastercard Impact philanthropic fund, to produce independent research, update scale global programs and empower a community of thinkers, leaders, and doers on the frontlines of inclusion growth. For more information and to receive its latest information, follow the center on Twitter and LinkedIn and subscribe to its newsletter.
“The Impact of Digital Transformation on Underserved Microenterprises: Results of Accion’s Partnership with Mastercard”, November 2022
Discover additional media content and other ESG stories from the Mastercard Center for Inclusive Growth at 3blmedia.com.
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