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Mastercard (MA), MFC Tie Up to Help Microfinance Companies

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Zacks Equity Research
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Mastercard Inc.'s MA Mastercard Center For Inclusive Growth will ink a deal with The Microfinance Centre (MFC) to enable micro-finance organizations and small business houses to embrace digitisation through a new international support program. This program is dedicated to microfinance institutions in Europe and Central Asia.

Mastercard has over and again proved its market-leading capabilities by lending a hand during these challenging times. This latest move will help 90 plus microfinance institutions (MFIs) and 300,000 small businesses across Europe and Central Asia sail through the COVID-led financial turmoil.

Amid the COVID-19 pandemic, multiple small organizations and microfinance companies are finding it extremely difficult to manage their operations. For many small businesses, finding recourse to funds required for running business, such as working capital, bridge loans and credit became quite a daunting task. This, in turn, caused many business units to shut up shop. Meanwhile, microfinance institutions faced with the risk of default limited their lending activities.

The tie-up of Mastercard with Microfinance is likely to ease the availability of working capital and bridge loans to small business houses.

With the help of Mastercard Center For Inclusive Growth, MFC will help microfinance companies digitize their activities. It will even include action-research plans to certify business-model realignments that will permit new kinds of microfinance institutions to emerge. These institutions will likely be strong enough to face any economic crisis and serve microenterprises better.

Notably, Mastercard has left no stone unturned to help SMEs globally, which have been hit hard by the pandemic so far. Some of its initiatives enabled companies to mitigate the adversities of the current situation.

Furthermore, the latest move underlines the fact that the company is trying hard to help companies meet their respective financial needs. To support small companies, it also rolled out enhanced and secured payments technology solutions. A few other companies, such as Visa Inc. V and Global Payments Inc. GPN are also backing SMEs so that they can navigate the financial turbulence easily.

American Express Company AXP also came up with back-to-business offers for small business card members.

Shares of Mastercard have gained 56.6% in the past year compared with the industry’s growth of 42.4%. Notably, the company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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