As the number of initiatives to expand financial inclusion across Africa continues to rise, the African Development Bank (AfDB) has announced a new partnership with MasterCard that will add to ongoing concerted efforts to make financial services more accessible on the continent.
According to the bank, the collaboration seeks to develop solutions that would drive inclusive growth in Africa by broadening access and usage of digital financial services, a goal that is in synchrony with the bank’s desire to actively promote sustainable economic growth and poverty reduction in Africa. For accomplishing this objective, MasterCard is a worthy partner as it can bring its proven expertise to bear in designing and scaling inclusive financial services infrastructure and solutions.
The bank further revealed the partnership will approach African governments and local private sector companies to develop and deliver affordable services that would meet the needs of a wide consumer base, with a unique focus on the traditionally unbanked. This approach is expected to build cohesive African financial systems that can drive inclusion at a country level and enable service delivery to traditionally excluded populations.
Additionally, the partnership will seek to invest in a set of innovative financial services companies and solutions targeted at addressing barriers that hinder financial inclusion as well as share knowledge across academic, policy and commercial sectors to create thought leadership on financial inclusion and economic development. By this unique approach, the new partnership is differentiable from other financial inclusion initiatives that have come before it.
“Despite the phenomenal economic growth in Africa, this has not translated into shared prosperity and better livelihoods for the majority. Growth has to be inclusive to be socially and politically sustainable. One key component of inclusive development is financial inclusion, an area in which Africa has been lagging behind other continents,” commented Dr Donald Kaberuka, President of the AfDB.
He added that broadening access to financial services would mobilize greater household savings, galvanize capital for investment, expand the class and number of entrepreneurs while affording many more people the opportunity to invest in themselves and their families.
Mr Ajay Banga, President and CEO of MasterCard, in his comments, posited that less than one adult out of every four in Africa has access to an account at a formal financial institution. This puts financial services penetration around the continent at less than 25 percent.
“While many of our industry partners have been active in this space, we believe that through our payments expertise, and the AfDB’s 50 years of experience in financing Africa’s economic transformation, we can achieve scaled impact and lasting transformation,” he said.
By Emmanuel Iruobe
