IFC, MasterCard extend partnership for financial inclusion agenda

Electronic payments lower the cost and increase the security of transactions, benefiting small businesses and consumers, paymentsafrika.com reports. 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 USD 250 million risk-sharing facility that will provide alternative coverage and share the settlement risk of participating emerging market financial institutions and 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 focus 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. Targeting of institutions with limited or no capacity to access a payment platform. Reaching 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.

The World Bank Group-MasterCard partnership aims to enhance financial access in emerging markets by developing and deploying innovative, scalable and sustainable payments solutions that reach institutions and customers in emerging markets with inadequate access to such services.