Promoting Inclusive Markets and Financial Systems
The MasterCard Foundation works with visionary organizations to provide greater access to education, skills training and financial services for people living in poverty, primarily in Sub-Saharan Africa. As one of the largest, independent foundations, its work is guided by its mission to advance learning and promote financial inclusion in order to alleviate poverty. Based in Toronto, Canada, its independence was established by MasterCard when the Foundation was created in 2006. For more information, please visit www.mastercardfdn.org or follow us on Twitter @MCFoundation.
A Savings Led Alternative to Financial Institution Building
One of the most pressing challenges for microfinance is reaching the hundreds of millions of households that lack access to financial services. Those living in rural areas with poor infrastructure, low population density and low levels of economic activity are the most difficult to serve. For MFIs, credit unions and banks the cost of serving this disbursed and impoverished population is prohibitive but an alternative financial services model is emerging that is reaching this market at scale. Small, often informal Member Owned Financial Institutions (MOFIs) that place savings not access to credit and the center, are successfully reaching the rural poor in Africa andAsiaat scale and sometimes in very large numbers. The CARE MMD initiative in ruralNiger, for example reaches close to 300,000 women organized into more than 10,000 independent groups and is one of the largest microfinance initiatives in all ofAfrica. MOFIs include various forms of informal self-help groups, and ASCAS (Accumulating Savings and Credit Associations) and the small savings and credit cooperatives.To examine the potential role of MOFIs in mobilizing savings and scaling up access to rural finance CGAP asked of two leading practitioners – Jeffrey Ashe of Oxfam America and Elisabeth Rhyne of Accion International to comment on this issue.