MICROCAPITAL BRIEF: Accion, BAC Credomatic, Genesis, Mastercard Move to Expand Digital Financial Inclusion as Part of Call to Action for Northern Central America

US-based payment technology firm Mastercard recently announced plans to further financial inclusion in El Salvador, Guatemala and Honduras through the development of digital financial services that bring “5 million people in northern Central America into the financial system and digitalize 1 million micro- and small businesses,” with a focus on woman-owned businesses. The financial services include incoming and outgoing digital payments as well as loans to help customers build credit histories and create jobs. The efforts are in support of the Call to Action for Northern Central America, an initiative launched by the US government in 2021 to create economic opportunity in the region, with the intent of reducing outmigration.

Mastercard’s plan depends on partnering with local financial services providers, the first two of which are BAC Credomatic, a Costa Rica-based bank serving micro-, and small enterprises (MSEs) and individuals throughout Central America, and Fundacion Genesis, a nonprofit focused on “economic and social development” in Guatemala. Accion, a US-based nonprofit using technology to increase financial inclusion, also is working with Genesis to meet similar goals under the Call to Action. Accion recently expanded its goal from delivering access to digital finance to 100,000 people in Guatemala to serving 1 million additional farmers and small business people across El Salvador, Guatemala and Honduras.

The government-backed US International Development Finance Corporation and the US Agency for International Development also have agreed to give the efforts unspecified support.

Established in 1952, BAC Credomatic provides financial services such as loans, credit cards, insurance and savings to individuals and firms of all sizes throughout Central America. As of 2021, it held assets valued at USD 28 billion.

Genesis offers loans for small business and household needs, as well as “business development and financial literacy training, female empowerment training and health education.” The microlender has 151 branches, 4,000 rural service points and a portfolio of USD 248 million as of 2021.

Founded in 1961, Accion is a nonprofit that seeks to alleviate poverty by offering services such as microenterprise loans and business training. The organization has 110 partner microfinance institutions providing financial services to entrepreneurs in 50 countries in Africa, the Americas and Asia. As of 2020, Accion reports total assets of USD 439 million. The investment subsidiaries of Accion include Accion Venture Lab, Accion Global Investments and Accion Frontier Investments. Accion also conducts research via The Center for Financial Inclusion.

Headquartered in the US state of New York, Mastercard connects consumers, financial institutions, merchants and governments in approximately 210 countries and territories. For the quarter ending March 2022, the firm reported net revenue of USD 5.2 billion.

By Ben Greissman, Research Associate

Sources and Additional Resources

Mastercard press release
https://www.mastercard.com/news/press/2022/june/dfc-and-mastercard-partner-to-deepen-financial-inclusion-in-central-america/

White House Call to Action fact sheet
https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/07/fact-sheet-vice-president-harris-announces-more-than-1-9-billion-in-new-private-sector-commitments-as-part-of-call-to-action-for-northern-central-america/

Accion press release
https://www.accion.org/accion-responds-to-vice-president-harris-call-to-action-with-commitment-to-expand-economic-opportunity-for-1-million-people-in-central-americas-northern-triangle

BAC Credomatic description
https://www.baccredomatic.com/es-ni/nuestra-empresa/sobre-nosotros

Fundacion Genesis homepage
https://genesisempresarial.org

Accion vignette on Genesis
https://www.accion.org/two-women-entrepreneurs-carve-out-economic-opportunity-in-guatemala

Accion homepage
https://www.accion.org

Mastercard financial reports
https://investor.mastercard.com/overview/default.aspx

Previous MicroCapital article on Mastercard
https://www.microcapital.org/microcapital-brief-gcs-international-mastercard-target-unbanked-in-jamaica-with-mobile-wallets-payment-cards/

Previous MicroCapital article on Genesis
https://www.microcapital.org/microcapital-brief-oikocredit-lends-13m-to-microfinance-institution-fundacion-genesis-empresarial-of-guatemala/