IFC, MasterCard set up $250m facility to boost financial inclusion

by Editor

April 28, 2015 | 12:21 am
  |     |     |   Start Conversation
International Finance Corporation (IFC), a member of the World Bank Group, and United States’ (US) MasterCard on Monday, signed an agreement to establish a risk-sharing facility, which is expected to provide millions of people in emerging markets like Nigeria access to electronic payments. The Central Bank of Nigeria (CBN) is aggressively pushing its financial inclusion strategy. Market observers are of the view that the 250 million risk-sharing facility can enable emerging market banks to provide increased access to secure and transparent financial services to millions and reach people currently excluded from financial services. According to them, the move is a crucial next step in their ongoing collaboration to increase universal financial access by 2020. Electronic payments lower the cost and increase the security of transactions, benefitting small businesses and consumers.
Besides, financial institutions in developing countries are keen to expand services, but are often held back by collateral requirements necessary to cover settlement risk. To address these constraints, IFC and MasterCard are setting up a risk-sharing facility that will provide alternative coverage and share the settlement risk of participating emerging market financial institutions. It is expected to lead to the issuance of millions of new cards, the majority of which will be debit cards for lower income customers. “The facility is a key step in the World Bank Group’s efforts to support the development and expansion of private sector electronic payments in emerging markets and reach our goal of universal financial access,” said Jin-Yong Cai, executive vice president and chief executive officer at IFC on Monday.
 “It will benefit individuals and small businesses by improving the availability of non-cash financial services, which are safer, more transparent and more efficient than cash”, he added. Speaking in the same vein, Ajay Banga, chief executive officer and president of MasterCard said, “To reach MasterCard’s goal of an additional 500 million people connected to financial services by 2020, we must all roll up our sleeves and get creative in how we build public-private partnerships. This partnership with the IFC is a model for how we can create opportunities and remove barriers for banks to include more people in the financial fold.”The focus of the facility will be on countries where inclusion needs are the greatest or where payment platforms are nascent.
Key aspects include: Increased ability for new financial institutions to join the MasterCard network and for existing ones to grow their payment services offerings and reach a wider segment of customers. The facility will also target institutions with limited or no capacity to access a payment platform. It will reach out to small businesses and individuals who currently transact most of their business or financial activities in cash or have only limited access to electronic payment services. IFC and MasterCard have a multifaceted relationship spanning investments and advisory projects in multiple countries, most notable of which is the Partnership for Financial Inclusion with MasterCard Foundation.
Ben Uzor

by Editor

April 28, 2015 | 12:21 am
  |     |     |   Start Conversation

Big Read |  


What Nigeria must do before signing AfCFTA

Nigeria’s President Muhammadu Buhari last Wednesday gave a hint that he would sign the African Continental Free Trade Area (AfCFTA)...

Top 100 (300 x250)

MTN Felele


Newsletter CompanyReport