PRESS RELEASE: Mobile Money for the Poor Expanded to Enable Millions in Africa to Access Financial Services
Friday, October 24, 2014
Mobile Money for the Poor (MM4P) has been in operation since 2012, supported by UNCDF, the Swedish International Development Cooperation Agency, the Australian Department of Foreign Affairs and Trade, and the Bill & Melinda Gates Foundation. New support from The MasterCard Foundation, $24.9 million over five years, will increase mobile-enabled delivery channels for financial services to the most economically disadvantaged people in three countries: Benin, Senegal, and Zambia.
While access to mobile financial services has made great strides in several countries, notably in Africa, LDCs present special challenges: they tend to have smaller populations and smaller transaction volumes, and are more rural than other countries. Physical infrastructure (roads, electricity and mobile signal coverage) is often limited, making it costly to maintain financial service infrastructure. As well, mobile network operators and financial services providers tend to invest less, seeing less mass market potential.
“MM4P is designed to address all of these issues,” said Ann Miles, Director of Financial Inclusion at The MasterCard Foundation. “That’s why we’re very pleased to support its expansion. We’re at a critical phase in reaching people who want and need access to financial services, but are not being served by banks or other financial institutions. This work will not just transform the lives of millions of people in three countries, it could well serve as a model to reach millions more people across Africa, even elsewhere in the world.”
MM4P aims to coordinate work amongst governments, financial service providers, mobile network operators, retail agents and other stakeholders to offer banking services to underserved populations in the three countries.
UNCDF Executive Secretary Judith Karl praised The MasterCard Foundation for supporting UNCDF in its fight to reduce poverty and accelerate progress towards the Millennium Development Goals. “We are very proud and honored to collaborate with an organization that shares with us the conviction that the fight against extreme poverty needs innovative approaches and strong partnerships,” she said. “The Foundation has for a long time been a key supporter of our efforts to extend financial services to people living in poverty. In developing countries where financial services are scarce, mobile money has a potential to be a powerful tool for poverty alleviation.”
The expanded Mobile Money for the Poor is expected to begin operations by mid-2015. By the close of the five-year programme, 10-12 percent of the adult population in Benin, Senegal, and Zambia should be able to conduct financial services via mobile channels on a regular basis.
“This new partnership will not only expand MM4P’s work geographically but also bring in a range of new research and measurement tools that will help ‘prove the case’ as to how funders and governments can successfully promote digital finance to reach the poor. We hope that other markets can learn from this investment,” said Tillman Bruett, UNCDF-MM4P Programme Manager.
MM4P’s long-term mission is to help low-income and rural households in LDCs increase their financial security through appropriate, affordable and secure means to receive, manage and save money through digital financial services.
Currently, some 2.5 billion people across the world are considered financially excluded, given that they have very limited or no access to formal savings, credit or insurance products and services. The United Nations and the G20 have ramped up efforts to enable more people worldwide to benefit from regular and sustained access to financial services.