Technology can be used to solve this issue, says Michael Miebech, adding that the Indian government’s efforts on this are laudable
Access to capital is a common factor among various segments such as small and medium enterprises (SMEs), emerging consumers and emerging markets, said Michael Miebech, CEO of Mastercard, on Saturday.
He gave some ideas on how technology can be used to solve this issue of access to capital for all these segments. One of his suggestions included open banking where data is easily accessible and shared. He lauded the Indian government’s efforts on this.
“In open banking, there’s a lot that you can do through both the private and public sector, as you’ve done in India. Though open banking, credit scoring is easy. Otherwise, people end up with collateral which none of them actually have. In the last 13 years at MasterCard, we’ve pulled over 800 million people into the financial economy through open banking,” he said, while speaking at the B20 India Summit being held in New Delhi from August 25-27.
Another point he said can help with access to capital is digital literacy. He said that digital identity is very important in this case but there are many countries where people are not digitally literate. Governments have to enable digital identities; digital literacy will come along with it.
“Think about all these people who are using a digital tool for the first time to make a transaction. They don’t know where their data is going. They don’t know where the transaction is going. Then something goes wrong and that just creates a big trust deficit. If you pull people into the financial system, you include them on a path to empowerment and they don’t trust the system, you’re not going to get there,” he said.
The B20 (Business20) is the G20’s dialogue forum with the global business community. Established in 2010, B20 is known to be the most prominent engagement groups in G20, with companies and business organisations as participants.
