- MasterCard, IFC to Expand Digital Financial Inclusion
Mastercard Foundation and the International Finance Corporation have struck a partnership to expand digital financial inclusion in Africa.
A digital study released by the IFC and MasterCard, titled ‘Aligning expectations: The business case for digital financial services’, highlighted a set of best practice financial modelling benchmarks for agent banking and mobile money solutions.
The IFC said the benchmarks would aid financial institutions as they launched or expanded digital financial services for greater financial inclusion in emerging markets, describing it as a critical step in achieving inclusive economic growth.
It said the benchmarks would help financial institutions design sustainable business models for affordable and accessible financial services, targeting previously unbanked populations such as small-scale entrepreneurs, low-income individuals, and rural communities.
The corporation added that the benchmarks were based on a four-year study of nine financial institutions pioneering agent banking and mobile money solutions in sub-Saharan Africa.
The Manager, IFC, Financial Institutions Group Advisory, Sub-Saharan Africa, Riadh Naouar, said the benchmarks showed a viable business case for digital financial services to expand financial inclusion.
According to him, the benchmarks will make it less costly and risky for new entrants to the market.
Naouar stated that the development of digital financial services led to an unprecedented increase in financial inclusion in sub-Saharan Africa over the past decade, adding that sub-Saharan Africa was the only region where the share of adults with a mobile money account exceeded 20 per cent.
He said, “Agent banking and mobile money have begun to transform the financial landscape in many African markets, and there is an increasing body of evidence to show that this has real, positive impact on people’s lives and livelihoods.
“The benchmarks study is a knowledge product of the Partnership for Financial Inclusion, a $37.4m joint initiative of the IFC and the Mastercard Foundation, to expand microfinance and advance digital financial services in sub-Saharan Africa.”