How technology creates business opportunities in Africa – especially for women

At the recent World Economic Forum (WEF) on Africa, held in Cape Town, Africa.com spoke to Shamina Singh, president of the Mastercard Centre for Inclusive Growth.

On the last day of the event, Singh had just concluded a panel discussion on digital transformation hosted by the centre and the Fletcher School at Tufts University, Massachusetts. Talking about the importance of this topic, she quoted Prof Bhaskar Chakravorti, dean of global business at the Fletcher School: “Digitisation in Africa could be what industrialisation was for Europe.”

What does inclusive growth mean to you?

There are 1.7bn people around the world who are not included in the formal economy. A lot of progress has been made over the past decade and, as a first step, at Mastercard we set a goal to achieve financial inclusion for 500m people by 2020. Now on the cusp of that goal, we recognise it’s just the start. Opening the door is important but the ultimate goal has to be inclusive growth – the long-term impact of our efforts. 

That means reimagining what growth means for everyone in today’s digital economy. Growth cannot be assessed using the mindset and measures of yesterday. It’s more than just an increase in wealth — it’s about human lives reaching their full potential. That means thinking about the whole ecosystem and connecting people to the networks that can not only help them get access to a system but also use it, grow from it and build a better life. 

In a world where more than a billion people lack access to even a form of identity and 3.4bn people, almost half the world’s population, still struggle to meet basic needs such as access to food and life-saving health care, this is about helping put more people in control of their own destinies. 

As Africa embraces the Fourth Industrial Revolution at an accelerated pace, how do the latest digital transformation trends affect the opportunity for digital inclusion?

The Fourth Industrial Revolution is the developing environment in which disruptive technologies and trends such as the Internet of Things, robotics, data science and artificial intelligence are changing the way we live and work. However, we can’t have the internet of everything without the inclusion of everyone. 

Globally, technology’s relentless transformation continues to gather momentum, presenting both challenges and opportunities for people all around the world. Building an economy fit for the digital age is a challenge that must be taken up by corporations, policymakers, research institutes, educators and philanthropic organisations, to safeguard employment and opportunity for all segments of society. 

The rise of e-commerce, entrepreneurship and digital adoption represents tremendous potential for inclusive growth across Africa. The continent’s burgeoning youth population, which is expected to grow by more than 50% by 2050, presents a significant opportunity to create a demographic dividend, unlocking further investment in digital infrastructure and creating a more robust and inclusive workforce.

Technology advances are driving the critical migration from cash to electronic payments, which is positively affecting individual economies in Africa and the global ecosystem at large. Across 70 countries studied by Moody’s, a 1% increase in usage of electronic payments produced an annual increase of $104bn in the consumption of goods and services.

As new tools and technologies are developed, financial services can be provided with greater speed, accountability and efficiency. These tools are helping segments of society and industries that are traditionally underserved in Africa: the micro-retail sector, the agriculture sector, the education sector, and female entrepreneurs.

Opportunity zones are a pillar of the work you do around the world. These zones in otherwise affluent areas allow communities to work together and shape their future. Does the concept of an opportunity zone apply in Africa?

The area we are focused on is inclusive economic development – making sure we lift up distressed communities so they aren’t left behind. While people-based strategies are critical, so too are place-based strategies. We are harnessing our technology, talent and data insights to help community leaders build plans for upward mobility and long-term inclusive growth within the communities they serve.

To get to the right outcomes, you need the right inputs. That’s why in the US, through data science and impact grants, we are helping community leaders take advantage of the qualified opportunity zones introduced by the Tax Cuts and Jobs Act.

The act might be country specific but we see a future where we take the principles of our work and apply them to other parts of the world. By understanding the economic trends in neighbourhoods, you can help attract investment, measure progress and protect community interests. This is particularly relevant when you consider that Africa has the fastest urbanisation rate in the world (Lagos is predicted to expand by 77 people every hour between now and 2030).

Fortune magazine recently ranked Mastercard second in its “Change the World” list of global corporations that are doing good while doing well. What does this mean and how were you were chosen for this award?

The private sector has a vital role to play in driving social impact. However, we cannot rely on philanthropy or corporate social responsibility (CSR) alone — both of which are critically important. This is not about trading off business interests against social interests. It’s about recognising that businesses thrive in a thriving world and fail in a system that fails too many.  

It is in shareholders’ interests that we explore how to use our products, technology, business models and understanding of ecosystems to address these fundamental social and economic challenges. Mastercard is turning commercially sustainable social impact into business as usual – that’s what it means to do well by doing good.

In 2015, Mastercard committed to bringing 500m people into the financial system by the end of 2020. Now on the cusp on that goal, we have set our sights beyond. Attention has turned to reimagining what it means to achieve inclusive growth for people, communities and economies around the world. 

It’s this attention to impact that set us apart for Fortune. The Centre for Inclusive Growth was commended for its work with female entrepreneurs. 

• In India, we have partnered with a local NGO to establish the first chamber of commerce dedicated to rural female entrepreneurs. By tailoring 13 services for female business owners, we are catalysing 10,000 small and micro-sized businesses to expand. 
• In Indonesia, Mastercard has a philanthropic partnership with the Commonwealth Bank to provide financial literacy and business skills to 15,000 female entrepreneurs through a combination of training, mentoring and digital tools. Together we launched the Women Investment Series, a skill-building programme for small businesses that will strengthen their operations and profitability.
• By partnering with a microfinance institution in Bangladesh to provide financial literacy and business development training, Mastercard has helped 175,000 female entrepreneurs access working capital credit to grow their small businesses.

We also continue to support the Mastercard Foundation’s goal to improve the lives of 33m people across the continent. We are proud that the economic health of the company has enabled it to grow into a $30bn-plus foundation – one of the largest in the world. 

You focus on how your work affects female entrepreneurs. Why is there a focus on women in Africa and how can female entrepreneurs, in particular, benefit from your work on financial inclusion?

Inequality and exclusion are two of the biggest barriers to women's prosperity. That isn’t just a problem in the developed or developing world alone.

More than 1bn people globally don’t have formal proof of identity and a disproportionate amount of these are women. This is especially pronounced in the lowest-income countries, where 45% of women lack foundational identification.

In addition, women’s access to financial services globally has stagnated since 2011 and 70% of women-owned small and medium-sized enterprises lack access to adequate financing, representing a $300bn credit gap each year.  

In Africa, there’s a real opportunity to drive change for female business owners through farming and access to financing. This requires strong partnerships and long-term commitment to deliver results.

• Women grow 70% of Africa’s food, so they are critical drivers of community commerce. Through the Mastercard Farmers Network, we are connecting thousands of smallholder farmers in East Africa and India to transparent digital marketplaces to safely connect with buyers and get fully paid for their produce. 
• With our partner, Unilever, we have also created a safe digital programme for micro-merchants in Kenya – 16,000 shop owners are already registered and more than half are women. The programme uses their Unilever buying history to provide a microcredit eligibility recommendation to the local bank. The bank then uses that history to approve an interest-free credit line so shopkeepers can stock their shelves and grow their businesses, instead of just buying what they can afford in cash on a particular day.

We are also involved in many other relevant networks and organisations that are mutually focused on advancing the role of women in Africa:

• Mastercard has extended its relationship with USAID to promote women’s economic engagement as part of the White House’s Women’s Global Development and Prosperity Initiative.
• Mastercard teamed up with African Women and Beyond to launch the Africa Women Leadership Network, drawing attention to the importance of the financial empowerment of women on the continent. The network brings together like-minded women from various business sectors to tackle challenges facing women in East Africa and across the continent.

This article was paid for by Africa.com.