Gates Foundation Awards $11 Million for Financial Inclusion in Africa

Gates Foundation Awards $11 Million for Financial Inclusion in Africa

The Bill & Melinda Gates Foundation has announced an $11 million grant to MasterCard in support of a new initiative to develop practical and cost-effective financial tools that expand access to financial services for tens of millions of people in East Africa.

Despite innovations in digital payment systems, two and half billion adults around the world are still excluded from the formal financial system and must rely on cash, creating significant risk and instability in their lives. MasterCard Labs for Financial Inclusion will work with local entrepreneurs, governments, and other stakeholders to generate new ideas for providing financial services that enable people living in poverty to guard against risk, invest in their future, and build financial stability over the long term. To that end, the three-year grant will support research and development efforts that explore how to create revenue streams that enable financial providers to service the poor profitably, how to lower customer acquisition and maintenance costs, and what features and functionality will drive usage.

An investment committee comprised of representatives from the Gates Foundation's Financial Services for the Poor program, MasterCard, and independent experts will select successful prototypes from the lab to advance to the incubation stage. FSP will reserve an additional $8 million to further test promising ideas that reach the incubation stage. All prototypes, incubated projects, and outcomes will be judged according to FSP's Global Access policy to ensure that the work stemming from the lab truly benefits  poor people.

"Too many people lack access to the most basic financial services, leaving them trapped in a cash economy that imposes greater risks and costs on those least able to afford them," said MasterCard president and CEO Ajay Banga. "Through the investment made by the Gates Foundation, coupled with our strong innovation processes, MasterCard will create and scale financial services that open up a world of inclusion and help people build better, brighter futures."