Press release: IFC and Mastercard Expand Partnership to Drive Greater Financial Inclusion in Emerging Markets
Mastercard and IFC, a member of the World Bank Group, today bolstered their partnership to drive financial inclusion, updating a $250 million global risk-sharing facility to expand access to electronic payments in emerging markets.
Electronic payments help underserved people and small businesses more fully participate in the formal economy. Yet, financial institutions in emerging markets often have difficulty covering their transaction settlement obligations, making it harder to rapidly scale financial services where they are needed most.
Updating an agreement originally signed in 2015, the revised agreement between IFC and Mastercard helps financial institutions in developing countries participate in the Mastercard network more effectively through a program in which IFC will guarantee up to 100 percent of the settlement risk. The new agreement will support a major expansion of the program to more participating banks and financial institutions.
Stephanie von Friedeburg, IFC chief operating officer said, “This partnership will help bring modern financial services to underserved people around the world. It allows us to pool our capabilities in risk management and financial technologies, and to leverage our global network of financial institutions to deliver financial inclusion.”
With the revised agreement, Mastercard will extend its efforts to identify, develop and implement programs with participating financial institutions. This will improve access to electronic payments for millions of people in emerging markets. The company will also continue to support a separate 2016 agreement with IFC to increase acceptance of electronic payments among small businesses and micro entrepreneurs in the same markets.
“True inclusion is not something any one entity can deliver on its own,” said Michael Froman, vice chairman and president, strategic growth at Mastercard. “It’s partnerships like this, combined with technology and know-how, that are truly driving greater inclusion in emerging markets. The programs the facility is developing around the world are vital to bringing people and communities into the financial system and on a path to prosperity.”
Mastercard’s broader work with the World Bank Group is helping to increase universal financial access by 2020. In 2015, the company committed to reach 500 million people previously excluded from financial services within five years. Today, the company has connected more than 330 million people around the world through programs like the Mastercard-IFC public-private partnership, with more to come.
Photo courtesy of Ismael Ferdous.
- Inclusive Fintech