Mastercard forms Supply Chain Digitisation alliance with partners

SMEs are at the receiving end of the COVID-19-led business disruption, which affected their supply chains and trade networks. These enterprises account for 90% of all global businesses, employing about half of all the workers and delivering more than 50% of GDP. The decrease in demand among the consumers caused a funding gap between the banks and SMEs. Even before the pandemic, the ADB estimated that there was a USD 1.5-trillion fund crunch in 2018 because of challenges in accessing cheap finance due to asymmetric information problems between suppliers and demanders of funds and high transaction costs. The International Chamber of Commerce estimates a potential USD 2-5 trillion shortfall in trade financing through 2021, if demand returns to the pre-COVID levels in global economy.

For the funding to reach the needy businesses, a new disbursal path is required. Mastercard along with its fintech partners will facilitate fast disbursement of funds from banks to MSMEs such as grocery stores, pharmacies, or restaurants. To this end, the company developed a collaborative solution to provide integrated digital funding solutions. Mastercard is committed to bring 1 billion individuals and 50 million MSBs within the digital economy periphery, according to Nasdaq.com.