The Customer Effect
How Mastercard is bringing financial inclusion to crisis-affected areas
- Finance companies are active on financial inclusion efforts during humanitarian crises, by delivering aid in the form of currency.
- An international coalition of aid agencies, nonprofits and companies argues that the delivery of aid to recipients through stored value cards should be an entry point into the formal financial system.

For many of the 65 million people around the world who have been forcibly displaced from their homes, the flight from a war or natural disaster means leaving behind one's possessions -- including a financial identity. Finance companies, such as Visa and Mastercard, are active in financial inclusion efforts, providing affected individuals with the tools to buy necessities, in collaboration with aid agencies. Mastercard, through Mastercard Aid, has been working with nonprofits including World Vision and Save the Children to deliver aid to displaced populations impacted by humanitarian crises.
"Financial inclusion is critical to making people achieve full economic potential," said Nina Nieuwoudt, vice president of new consumers at Mastercard.
The company said the shift from in-kind (delivery of tangible aid items like food and clothing) to currency solutions (for example, cards or vouchers) is big win for both aid agencies and the recipients, who now have more freedom to use the stored value cards as they see fit. And of course, it makes the companies money: Mastercard said its revenue stream from the cards is based on agreements with aid agencies and other partners. And it also lays the groundwork for future customers.
"It's a lot cheaper and a lot more transparent [for the aid agencies], and a big part of it is the dignity of the person receiving the aid," said Nina Nieuwoudt, vice president of new consumers at Mastercard.
Access to financial services is now deemed such an important path to self-sufficiency that a major global international development body is saying it should be part and parcel of all humanitarian aid efforts.
Last month, Consultative Group to Assist the Poor (CGAP) released a report arguing that "embedding" financial inclusion in humanitarian aid efforts will more quickly propel disadvantaged populations out of poverty. Housed at the World Bank, CGAP is made up of 34 organizations that include government aid agencies, nonprofit foundations (for example, the Ford Foundation) and the philanthropic arms of finance companies like Citi and MasterCard.
"Financial inclusion allows low-income households to build assets; mitigate shocks related to emergencies, illness, or injury; and make productive investments," read the report. "Increased use of emergency cash transfers and digital mechanisms to address immediate vulnerability may offer an opportunity to enable financial inclusion."
Matthew Soursourian, a financial sector analyst at CGAP and one of the authors of the report, said that in the international development field, financial inclusion has moved from being seen as an objective to a cross-cutting tool that impacts other areas. He said providing aid through cash or vouchers is still very new -- just six percent of international aid is not delivered through in-kind methods -- but the delivery of aid through this method often stops short of helping displaced people acquire bank accounts and enter the formal financial system.
"They will create their own kind of debit card that's closed loop and can only be used at certain stores," Soursourian said. "We're encouraging humanitarian actors to provide a bank account or some sort of transaction account, and there may be ways to create a no-frills account or an account with mobile money providers." And with the success of mobile money transfer services like M-Pesa, with over 20 million registered users in 2015, technological innovations offer potential to help the unbanked and underbanked access the financial system.
Mastercard, which has this service active in nine countries, mostly in the Middle East and Africa, said closed-loop cards offer the means to purchase goods where no financial services exist.
"There are parts of the world where there is no connectivity, such as rural outlying areas," she said. "There are areas where there are no ATMs or point-of-sale devices," noting that a points card makes sense when no other financial services are available. She added that in communities with greater access to traditional financial services, such as Lebanon, an ecosystem with debit cards and bank accounts was possible.