Partnership for Financial Inclusion Learning Event

Remarks by Ann Miles, Director, Thought Leadership and Innovation Mastercard Foundation

Dar es Salaam, Tanzania, Oct. 3-4, 2018

Good morning! I am pleased to be here on behalf of the Mastercard Foundation to celebrate our Partnership for Financial Inclusion with the IFC and all of you here today who have made this partnership a success.

I would like to thank the IFC team for organizing this event. Thank you also to the 14 IFC clients who have collaborated with us in this Partnership and to the early funders of this work, the Development Bank of Austria and the Swiss State Secretariat for Economic Affairs. We are also grateful to the Bill and Melinda Gates Foundation and to the UK’s Department for International Development for joining this Partnership as well.

This Partnership was born in 2011/2012 when IFC and the Mastercard Foundation realized we had a common objective: to enable millions of people in Africa to access safe, affordable, convenient, and lasting access to financial services.

At the same time, we had to do that in a way that was commercially viable and sustainable. In other words, there had to be win-win solutions for consumers and financial services providers.

Little did we envision what would happen over these six years in the environment for financial inclusion, and in this Partnership.

As Riadh mentioned, in 2011 the level of financial inclusion in Sub-Saharan Africa was just over 23 percent. In 2017, it was almost 43 percent, with a significant increase from digital financial services.

In fact, one can say that the improvement in financial inclusion on the continent is largely due to the success of digital financial services.

According to Findex, while the share of adults in Sub-Saharan Africa with a financial institution account barely budged, the share with a mobile money account almost doubled to 21 percent. In every other region of the world, mobile money use is lower than 10 percent.

The ethnographic study conducted as part of this Partnership revealed that in the economies of Sub-Saharan Africa money has always been ‘mobile.’ It showed that family structures and other networks are crucial for such mobility to take place. In my view, this is why digital financial services are proving to be so successful.

Riadh has mentioned the numbers, but they are so impressive, I want to repeat them.

Our partnership with the 14 financial services providers has resulted in 11.4 million new digital financial services users on the continent. This is a 250 percent increase from the baseline.

The Partnership has also seen 39,500 new banking agents, 1.2 million new savings accounts, 7,000 new credit accounts, and $390 million in monthly transactions. These results have far exceeded our original expectations, and I congratulate you all.

The success of our partnership has rested on four critical factors:

  • A committed and professional team at IFC, with guidance from a strong Advisory Committee.
  • A robust research and learning agenda which has generated more than 20 influential publications, from field notes and handbooks to research reports. One of my favorites is the report on why women make the best digital financial services agents, which was documented in a research study with the microfinance institution FINCA in the Democratic Republic of Congo.
  • A third critical factor has been the flexibility and adaptation demonstrated as market conditions changed.
  • Finally, there’s been a commitment to results with clients and sustainability at the centre of our work.

Over the course of today and tomorrow, we will talk about the future of digital financial services and where they will take us. IFC surveyed many of the people and companies in this partnership. The responses revealed that many believe that the provision of financial services in the future is an even race between banks, MNOs, and fintechs, and that blockchain technology will be primarily applied for value chain payments.

I respectfully disagree. Ten years ago, we didn’t imagine the power of the smartphone, and I would argue that we will see new innovations in the next five, ten years that we don’t conceive of today. You will hear this from some of the speakers featured today and tomorrow.

I would like to remind us that the journey, however, is not over. Financial inclusion at 43 percent for Sub-Saharan Africa is not acceptable. We should continue to work hard to reach those who need and want financial services, those who are unserved or under-served, including women, youth, and rural populations.

This leads me to my next set of comments.

Our Foundation has recently committed to a bold, new strategy, Young Africa Works to ensure that 30 million young people in Africa, primarily women, obtain dignified and fulfilling work by 2030. Our work in digital financial services will help us achieve that goal.

In the last decade we have learned that solutions are needed to create employment or entrepreneurship opportunities for youth which go beyond education and skills training. Young people need to be able to connect with market opportunities.

Micro, small, and medium-sized businesses, the backbone of most African economies, need to grow, create jobs, and hire more people. These businesses need capital, management expertise, and markets.

We’re also seeing many new business models from companies, some of them in the room with us here today, which are leveraging technology to improve their data analytics and systems to grow their businesses and access capital. Customers are reaping the benefits with broader and more affordable options.

In addition, governments are exploring how to improve their digital infrastructure, digitize payments, and put in place regulations to ensure digital financial services can be made available to, and used, by everyone.

We all know of the demographic bulge coming in Africa. At the Mastercard Foundation, we don’t see this as a reason for panic. Rather, we see the growing numbers of youth of Africa as an opportunity to transform the continent, especially in this digital age. Let’s continue working on the challenges in financial inclusion around safety, affordability, convenience, and sustainability so that what has already been achieved, especially in this Partnership, can be leveraged for even greater success on the continent.

Once again, let me congratulate all of our partners for the work they have carried out over these last six years — work that has led to a real and positive difference in the lives of millions of people in Africa.

And, let me thank IFC once again for being such a valued partner over these six years, as well as for organizing this two-day learning event. I know it will be as informative and useful to you as the entire Partnership for Financial Inclusion has been to us.

Thank you.