Expanding digital ID, credit system positions Mastercard as commodity broker to the poor
Mastercard is expanding its Community Pass scheme to India where it plans to enroll agricultural workers with digital ID via its Farm Pass product. The platform will offer them credit and allow a Mastercard system to work as a clearing house for produce with the aim of enabling farmers to get better prices for their crops.
India has already enrolled the vast majority of residents in its Aadhaar biometric digital national ID. Mastercard’s Farm Pass is on track to enroll 30 million people worldwide, including 15 million in Asia Pacific.
The scheme is spreading to 33 countries in Africa.
“While technology has brought profound benefits to much of the world, digitally excluded people in remote communities, like most farmers, face unique challenges in breaking the cycle of poverty,” said Ari Sarker, president, Asia Pacific, Mastercard, as quoted by SME.Asia.
“Too often, smallholder farmers’ profits are at the mercy of forces outside their control, making them price takers rather than price makers.”
The system digitizes farmers’ identities and growing history. By seeing their sales, farmers using the platform can then be used as a basis to apply for loans to improve their businesses. It effectively cuts out the middlemen – the brokers – to get farmers better prices, and embeds them in the digital payments system.
The scheme is also on track for boost, if indirectly. The U.S. International Development Finance Corporation (DFC) seeks to support investments up to US$50 million in financial institutions and service providers that work with the payment firm’s Community Pass network.
