With the Black Lives Matter protests sparking new dialogue about race relations within the United States, more corporations have been forming new initiatives to end long-standing racial discrimination across different sectors. This week, Mastercard has unveiled its new commitment toward the racial wealth gap within the Black community with a $500 million investment over the next five years.
The new fund will go to funding products, services, financial support, and technology to help Black entrepreneurs and residents across the country access affordable resources to help secure capital for different ventures. “We’ve been focused on driving financial inclusion around the world for more than a decade – it’s core to who we are as a company and how we think about our role in society,” said Mike Froman, vice chairman & president, Strategic Growth for Mastercard, in an email interview with BLACK ENTERPRISE.
“However, the racial injustice that has come to fore over the past few months, reflecting centuries of structural inequities, has provided an additional focus to that work and mobilized broad-based engagement by our employees and leadership.”
“We want to bring the same strategic approach to this issue as we have to financial inclusion—combining our products and services, technology and people, philanthropy, and thought leadership,” he added. “We will be addressing the wealth and opportunity gap faced by Black families and Black-owned businesses, including by providing access to safe and affordable financial services and capital to start and run a business.”
New initiatives under the new commitment will include various projects across the country, including the L.A. Mayors Fund and Accelerator for America to help Los Angeles residents impacted by the COVID-19, or novel coronavirus, pandemic. “Black small business owners historically have been left behind because of exclusion from financial networks that enable access to capital and loans, predatory credit policies, and the lack of banking relationships,” said Marla Blow, SVP of Social Impact North America Mastercard Center for Inclusive Growth, to BLACK ENTERPRISE.
“The number of Black-owned businesses fell by 41% from February to April 2020. In contrast, the number of white business owners fell by 17%. Over the last few years, [Mastercard has] been working with Community Development Financial Institutions (CDFIs) to digitize application processing and fund distribution as well as create digital connectivity to relevant programs like SBA/PPP systems,” Blow added.
“This has helped them expand their reach and scale – more loans to more business in more places. [So far, Mastercard has] helped enable $250 million in capital to flow to Black-owned businesses in the U.S. since 2018 and are working to triple that amount through this effort to $750 million.”