Sound, inclusive, and sustainable financial markets are essential to building shared prosperity and eradicating poverty. Yet, as many as 2.5 billion adults lack access to financial services such as payments, credit and savings accounts. Although the small-scale business sector is the engine of growth in many economies, it is estimated that over 200 million micro, small and medium enterprises have no access to the credit necessary to grow and prosper.
In Sub-Saharan Africa, financial inclusion has increased rapidly in recent years due mainly to the development of digital financial services and innovative business models such as agent banking. More than 30 percent of adults had a bank account in 2014, up from 24 percent in 2011. While just 2 percent of adults worldwide have a mobile account, 12 percent in Sub-Saharan Africa have one.
IFC helps advance financial inclusion through investments in the financial sector, advisory services to investment clients and other private sector clients, and through advisory services to stakeholders in financial infrastructure. In order to reach Universal Financial Access by 2020, IFC is committed to extend formal financial services to 600 million people, and many of our focus countries are on the African continent.
EXAMPLES OF WHAT WE DO
Financial Institutions Group
IFC’s Financial Institutions Group invests in financial institutions and financial services providers across Sub-Saharan Africa to advance financial inclusion and increase access to finance for underserved markets. It also provides advisory services to clients to strengthen institutions and increase capacity to provide the relevant products and services to new markets. We work with approximately 160 financial intermediaries on the continent enabling them to play a constructive role in economic growth, reinforcing responsible finance, and introducing environmental and social standards in many clients for the first time.
The Finance & Markets Global Practice works with a range of public and private stakeholders to build and enhance the necessary financial infrastructure to advance financial inclusion, with programs focused on e.g. collateral registries, credit reporting frameworks, leasing, and index insurance. Solid financial infrastructure provides the necessary rails for the expansion of financial inclusion and inclusive economic growth. It makes it possible for low-income individuals and micro-entrepreneurs to access finance through the use of movable and reputational collateral, whilst ensuring a sound regulatory environment.
The Partnership for Financial Inclusion
IFC’s flagship program on financial inclusion in Africa is the Partnership for Financial Inclusion, a seven-year $37.4 million joint initiative of IFC and The MasterCard Foundation that provides advisory services to microfinance institutions, banks, and mobile network operators, to develop and test new business models to extend affordable and accessible financial services to small-scale businesses, low-income people, and rural communities. An important objective of the Partnership is also to share research and lessons learned from our projects with the industry for the public good. Click here to learn more