IFC, mastercard extend financial inclusion for millions in Africa
IFC, a member of the World Bank Group, together with the Mastercard Foundation, released a new report documenting the transformation underway in financial inclusion in Sub-Saharan Africa.
The findings are based on lessons learned from joint projects that have resulted in access to new digital financial services for more than seven million users on the continent over the past six years.
Digital Access: The Future of Financial Inclusion highlights the phenomenal success of digital financial services in Sub-Saharan Africa and outlines the challenges still to be tackled to reach universal financial access.
It captures the experience and knowledge gained by IFC and the Mastercard Foundation in supporting the growth of digital finance in Africa under the joint Partnership for Financial Inclusion since 2012.
Working together with 14 microfinance institutions, banks, mobile network operators, and payments service providers across the continent, the joint initiative has resulted in 7.2 million new digital financial services users (a 250 percent increase from the baseline), 45,000 new banking agents, and $300 million in monthly transactions.
“Financial inclusion is one of Africa’s great success stories of this decade. Mobile money solutions and agent banking now offer affordable, instant, and reliable transactions, savings, credit, and even insurance opportunities in rural villages and urban neighborhoods where no bank had ever established a branch,” noted IFC’s Chief Executive Officer Philippe Le Houerou and Mastercard Foundation President and Chief Executive Officer Reeta Roy in a joint foreword to the new report.
Financial inclusion in Sub-Saharan Africa has increased dramatically over the past decade, from 23 percent in 2011 to 43 percent in 2017, according to recently released data from the World Bank Findex survey. Sub-Saharan Africa is the only region where the share of adults with a mobile money account exceeds 10 percent.
“The Partnership for Financial Inclusion has been an important actor in helping to drive financial inclusion in Africa,” said Ruth Dueck-Mbeba, Senior Program Manager at the Mastercard Foundation.
“We’re proud of the work that our partner, IFC, has led over the past six years. It has enabled millions of people to benefit from access to financial services. More than that, the knowledge that we’ve gained will lead to millions more people improving their lives and their communities by being able to join the formal financial services sector.”
There is an emerging body of evidence on the impact that digital financial inclusion can have on inclusive economic growth and development. A study in the report shows that smallholder cocoa farmers in Côte d’Ivoire who saved regularly were better able to feed their families than those who did not save, irrespective of the farmers’ annual income.
The same study also revealed that many smallholder cocoa farmers felt ‘socially excluded’ by traditional banks but were generally accepting of agent banking and digital services.
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