Mastercard, Mercado Libre, Common Cents Lab, and IDB Join Forces to Improve Financial Resilience Among Entrepreneurs and Gig Workers
If you’ve been thinking more and more about saving money during the past year, you’re not alone. While the pandemic has upended our personal finance habits, small changes in our routine can make a big difference. A new initiative in Latin America supported by Mastercard, Mercado Libre, the IDB’s Retirement Savings Laboratory, and Common Cents Lab, a financial behavior research lab at Duke University, seeks to use behavioral science to help entrepreneurs and SMEs in the region make better financial decisions.
According to the IDB’s COVID-19 Labor Market Observatory, during the COVID-19 pandemic, more than 31 million people lost their jobs in Latin America, and the United Nations anticipates the worst recession for the region in a century. Small- to medium-sized enterprises (SMEs) and entrepreneurs who are actively working, or those who are deciding to enter the digital economy at this stage, must have sufficient financial resilience to overcome this period and be even better prepared to weather financial shocks. The partners collaborating in this program agree that financial resilience is the ability to prepare for, deal with, and recover later from economic shocks.
With support from the Mastercard Center for Inclusive Growth for the next two years, Common Cents Lab team will work with digital platforms including Mercado Libre, the largest e-commerce site in Latin America, to design strategies based on behavioral science, which can be validated and adopted by multiple players in the region. Thus, these strategies will contribute to the growth of digital platforms offering greater financial resilience for the most vulnerable entrepreneurs and workers.
Photo courtesy of Johen Redman.