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.
Banking on Change: Breaking the Barriers to Financial Inclusion
The report, Banking on Change: Breaking the Barriers to Financial Inclusion examines the barriers to financial inclusion in developing countries and the potential boost to the global economy that large scale financial inclusion represents.
The Banking on Change partnership with Barclays, CARE and Plan has reached 513,000 people in just three years. On average, each member has saved $58 per year through savings groups. Multiplying this figure by the 2.7bn unbanked people could represent $157bn in savings annually. Where these savings groups are then linked to the formal financial system this could provide an influx in banking deposits, which could in turn be used to finance businesses and households.
One of the report's key recommendations is that for any financial inclusion programme to be ultimately sustainable, it must offer a formal financial linkage model with the banking sector, and that this requires much greater co-operation from local and global financial institutions.
Other key recommendations include:
- Members of the UN High-level Panel, including David Cameron, identifying a new international framework to replace the current Millennium Development Goals after 2015, should ensure financial inclusion is on the agenda.
- National governments, donors and financial services providers should recognise, and support, the scale-up of savings-led microfinance solutions as part of an overall strategy for tackling poverty.
- Governments should invest in, and extend, access to financial education, with a particular focus on women and young people, whilst also increasing provision of training in business skills and entrepreneurship.
- Financial institutions and regulators should recognise community-based savings models and support the development of appropriate, transparent products that protect poor people's money, whilst opening up access to outreach banking and mobile technologies that can facilitate group banking.