Good news for the Agricultural sector, today MasterCard Foundation launched a USD 50 million challenge fund. The fund is meant to improve the lives of smallholder farmers. The idea is to create an enabling environment for financial services to be provided to rural farmers. MasterCard Foundation today launched a US$50 million challenge fund to improve the lives of smallholder farmers in Africa by enabling businesses to begin or expand financial services in rural areas of Sub-Saharan Africa.
“The idea is to provide access to training, markets, financial services and insurance” according the Anne Miles, the Financial Inclusion Director of the Mastercard Foundation. “the fund is meant to be a catalyst and is meant to stimulate the private sector to engage with farmers.”
Reeta Roy, President and CEO of The MasterCard Foundation said that even though there has been substantial economic growth, this has not befitted the rural poor. Many of these are mostly smallholder farmers who are women depending on subsistence agriculture for their livelihoods. “This new Fund will stimulate private sector organizations to provide affordable and accessible savings, credit and insurance products. These services are essential to enable African farmers to increase productivity and incomes and, ultimately, grow rural economies.”
The MasterCard Foundation Fund for Rural Prosperity supports innovative ideas that can be scaled up (potential) and that also have a social impact.
• Innovation: $15 million will support the development of ideas for new products, services or processes that increase access to finance for the rural poor; and
• Scaling: $35 million will help to scale the most promising ideas or pilots that have the potential to drive financial inclusion for smallholder farmers in new geographic areas.
Rural households (over 70%) derive most of their income from agriculture. Getting finances from financial institutions has been a challenge as many of these institutions lack the knowledge and capacity to develop products and services for this segment.
Prof. Njuguna Ndung’u, Governor of the Central Bank of Kenya, said: “Over the last decade, the Central Bank of Kenya has championed financial inclusion supported by innovation in the financial services sector in Kenya. As a result, the proportion of Kenyans who are unbanked has declined from 38.4 percent in 2006 to 32.7 percent in 2009 and 25 percent in 2013. Kenya’s vision as espoused in its developmental blueprint, ‘’Vision 2030’’ is to leapfrog penetration of financial services by 2030. Financial inclusion is the surest way to achieve inclusive growth for Kenya. We expect that this initiative by The MasterCard Foundation will be critical to achieving this vision by extending financial services to a broader spectrum of rural households.”
Applications for innovation proposals will be accepted from 20th January to 20th March 2015. These are for projects in 24 countries including Burundi, Benin, Burkina Faso, Cameroon, Côte d’Ivoire, Djibouti, DRC, Ethiopia, The Gambia, Ghana, Kenya, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, Senegal, Sierra Leone, Tanzania, Togo, Uganda and Zambia. The project will be managed by KPMG International Advisory Services. Later in the year, applicants will have the opportunity to submit proposals for scaling business ideas, products or services in eight countries (Côte d’Ivoire, Ghana, Kenya, Mozambique, Senegal, Tanzania, Uganda and Zambia).
More information, including application forms, guidance notes and details on eligible countries are on the website: www.frp.org