Shs 1 billion Mastercard Foundation Fund to empower 8 million people through Equitel et al

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  • 4 years ago
  • Posted: April 15, 2016 at 3:11 pm

By 2010, extremely poor people living in sub-saharan Africa were approximated to be around 414 million, a figure that decreased to about 389 million by 2012 despite population increase by an average of 2.74% over the same period. The reduction in poverty level is due to initiatives of the Millennium Development Goals (MDGs) that aim to, among 7 other MDGs, reduce extreme poverty globally. In line with the MDG of reducing poverty, Mastercard established the Mastercard Foundation Fund worth $50 million (shs 5 billion) aimed at enabling 1 million people in rural Africa to have access to appropriate savings, credit and insurance products and services by 2020. To achieve this goal, Mastercard Foundation Fund set to work with Financial Institutions funded by the Foundation through a competitive process that has seen five companies win shs 1 billion for the 2015 funding phase.

The competitive process is such that companies with ability to offer innovative and financial products that translate to alleviating poverty among the extreme poor through financial inclusion apply for the Mastercard Foundation Fund under either the Innovation Competition or Scaling Competition. The competitions are in three phases for 2015 (already awarded), 2016 (application in progress) and 2017 (to be applied for immediately the 2016 competition has been awarded). After the 2017 competition, Mastercard Foundation Fund will dedicate the next four years to monitoring and evaluation of the projects that received financial support.

The five companies that have won the 2015 shs 1 billion fund (over $10.6 million) are Finserve Africa Ltd – Equitel (Kenya), M-KOPA (Kenya), APA Insurance (Kenya), Musoni (Kenya) and Olam (Uganda). Although there were impressive applications from many companies “with proposals to scale up their work and make a real difference in the financial lives of people living in poverty”, the five emerged winners as they demonstrated “innovative approach backed by a solid business proposal and a commitment to excellence that convinced us to support their effort”, said Ann Miles, Director of Financial Inclusion & Youth Livelihoods at The MasterCard Foundation.

The first phase of the Mastercard Foundation Fund in collaboration with the five winners will see nearly 8 million people in rural areas of Kenya, Tanzania and Uganda will have access to formal financial services by 2020. Mastercard Foundation Fund believes that the financial inclusion will help the targeted  move from extreme poverty to self dependency through exploring new business opportunities.

Speaking during the award, Nick Hughes, Chief Product Officer and Co-Founder, M-KOPA, said that “M-KOPA Labs is delighted to be partnering with The MasterCard Foundation to explore new ways to deliver credit services to rural customers and farmers in Tanzania, many of whom live beyond the grid and without access to financial services. The project with The MasterCard Foundation will be aimed at helping more low income Tanzanians to access clean energy, agricultural inputs and financial services.”

As already stated, the 2016 competition opened on April 14, 2016 and will close in June 10, 2016. Any company from anywhere in the world can apply but the implementation must be in one or more of the eight countries of focus in Africa namely Côte d’Ivoire, Ghana, Kenya, Mozambique, Senegal, Tanzania, Uganda and Zambia.

“Last year, we were very impressed by the quality and originality of applications received for the Fund for Rural Prosperity’s first Scaling Competition,” said Ann Miles. “This year, we expect to see proposals from companies active in financial services, including those working in fintech, insurance and along the agro-industry value chain. The goal remains the same – to enable larger numbers of people to be part of the formal financial sector in their countries.”

 

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Odipo Riaga
Managing Editor at KachTech Analytics Ltd
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