New Intiatives with MicroCred Aim to Extend Impact of Microfinance in Africa
IFC’s efforts to strengthen the impact of its microfinance network has extended further through two new agreements with MicroCred Madagascar and MicroCred Senegal. IFC has 27 microfinance investment clients in Sub-Saharan Africa, many of which are also supported by IFC’s advisory services.
The new agreements in Madagascar and Senegal are valued at $3.2 million combined, and will specifically strengthen the supply of affordable financial services to clients in rural areas.
The recent agreements are part of the Partnership for Financial Inclusion, a joint $37.4 million initiative by IFC and The MasterCard Foundation that aims to expand the availability of sustainable microfinance and develop mobile financial services to increase financial inclusion in Sub-Saharan Africa.
Mark Flaming, Chief Operating Officer of MicroCred Group, said, “The Partnership for Financial Inclusion is supporting MicroCred’s ambition to make financial services easier to access for the entire population. In addition to funding, we are benefiting from the advisory services and expertise of IFC and the collegial exchange with other Partnership clients.”
Entrepreneurs and consumers in rural areas in Madagascar and Senegal remain mostly excluded from financial services due to the prohibitively high cost for banks and microfinance institutions to establish remote branch networks to serve a disparate clientele. That means rural communities lack safe means to save money, as well as access to credit for investment in farming and small-scale businesses. They often have to spend considerable effort and resources just to reach urban centers in order to transact money.
IFC will provide advisory services for three years to both MicroCred Madagascar and MicroCred Senegal to help develop mobile financial services to increase outreach in rural areas. In Senegal, IFC will also support MicroCred’s product development to address the lack of microfinance products adapted specifically to the needs of the rural clientele.
David Crush, Manager of IFC Access to Finance in Sub-Saharan Africa said, “Access to finance is an important catalyst for development. Making financial services available in underserved rural communities is critical to achieving the goal of universal financial access to all working-age adults by 2020.”
It is estimated that within three years MicroCred Madagascar will have reached an additional 207,000 low-income individuals and small-scale entrepreneurs primarily outside urban centers, while MicroCred Senegal will have added 127,000 new clients.