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 Africa. As one of the largest private foundations its work is guided by its mission to advance learning and promote financial inclusion to create an inclusive and equitable world. Based in Toronto, Canada, its independence was established by Mastercard when the Foundation was created in 2006. For more information and to sign up for the Foundation’s newsletter, please visit www.mastercardfdn.org. Follow the Foundation at @MastercardFdn on Twitter.
In 2009 CARE’s Save Up program launched three pilot projects to provide non-financial linkages in the three Save Up countries: bank accounts in Malawi, mobile phone banking in Tanzania and funeral insurance in Uganda. This publication describes the process of linking VSLA members in Malawi with savings and credit from a major micro-finance bank. Lessons learned that will inform the next phase of the pilot include:
- VSLAs need financial education and training to use bank linkage effectively.
- The bank and the IPOs must be properly trained on the product offerings and on the VSLA methodology if they are to pass this information on to communities.
- The linkage process should be given enough time and should not run parallel to group formation and training.
- Wholesale bank loans do not interfere with the performance of VSLAs within their home groups.
- To stimulate competition, it would be beneficial to offer linkages with more than one bank.
- Banks being linked should be more transparent and accountable to the VSLAs to inspire the groups’ confidence.
- Banks should explore more effective means of getting access points closer to the groups, especially those that are far from bank outlets and main roads.
- VSLAs need access to account statements on a regular basis. OIBM is currently establishing a special account code to ease tracking.