The International Finance Corporation (IFC), a member of the World Bank Group and MasterCard Foundation have launched a partnership to increase access to financial services for an estimated 5.3 million people in Sub-Saharan Africa.
Building on recent economic momentum and stability in many African economies, the project will create new opportunities for economically disadvantaged people to expand businesses, gain access to cost-effective financial services, and manage risk.
Through this new US $ 37.4 million partnership, IFC and MasterCard Foundation will help microfinance banks expand more rapidly and develop new products and cost-effective delivery channels, while expanding coverage in new, often hard-to-reach locations. The project will also help providers to deliver low-cost mobile financial services to low-income customers.
“Disadvantaged people derive real benefits from having more control over their finances, and our partnership with IFC will help bring responsible financial services to a significant number of people in Sub-Saharan Africa,” said Reeta Roy, MasterCard Foundation CEO in media release.
“As we scale institutions and support new mobile financial service opportunities, this partnership will also create knowledge that will be invaluable in promoting greater financial inclusion,” added Roy.
The MasterCard Foundation has become a major player in the field of microfinance, particularly in Sub-Saharan Africa, having forged partnerships worth more than US $ 230 million since its inception in 2006. To date, these partnerships have helped provide financial services to over a million people, and provided another two million with access to financial education.
The MasterCard Foundation partnership is IFC’s largest with a private foundation.
“This partnership leverages IFC’s global expertise, local knowledge, and client networks to promote greater financial inclusion,” said Nena Stoiljkovic, IFC Vice President for Business Advisory Services, adding that the partnership would help IFC clients do more for low-income customers in Africa.
Since its first microfinance investment in 1997, IFC’s involvement in microfinance has steadily increased, and IFC is now one of the top three global investors in microfinance. As of June 2011, IFC had directly committed over US $1.2 billion in investments to microfinance projects globally, with more than 150 financial institutions in over 60 countries.
IFC invested early in mobile financial services, supporting pioneers such as WIZZIT in South Africa, and providing advisory support to MTN in Nigeria and Airtel in Madagascar. IFC’s portfolio includes six investments with dedicated e-payment service providers, and investments with financial intermediaries and mobile network operators offering mobile wallets.
IFC’s microfinance and mobile financial services programs in Sub-Saharan Africa have received support from the African Development Bank, Austrian Development Bank, the Swiss State Secretariat for Economic Affairs (SECO), and the governments of Austria, Denmark, Japan, Luxembourg, and the Netherlands.