Families in rural Sub-Saharan Africa have endured long spells of financial exclusion with over 70% deriving a large portion of their income from agriculture. With most of the farmers using farm-to-mouth models, poverty continues to ravage them and their dream to diversify and commercialise farming remains that.
“Over the last decade, many countries in sub-Saharan Africa have enjoyed substantial economic growth but much of this growth has not benefitted the rural poor, especially smallholder farmers who are mostly women and who depend on subsistence agriculture for their livelihoods,” said Reeta Roy, President and CEO of The MasterCard Foundation.
The MasterCard Foundation has challenged this notion by launching a Kshs4.6billion (US$50million) 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. “This new Fund will stimulate private sector organisations 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,” added the MasterCard boss.
The fund is meant to support innovative ideas that have the potential to grow to scale and also have a deep social impact on the lives of rural people living in poverty throughout Sub-Saharan Africa. The kitty has been divided into two categories where KShs1.4 billion ($15million) will be channelled to development of ideas for new products, services or processes that increase access to finance for the rural poor.
The rest 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. Lauding the move by MasterCard, Governor of the Central Bank of Kenya Prof Njuguna Ndung’u noted that the lender has been conducting aggressive campaign for financial inclusion which has seen exponential growth in the number of Kenyans with bank accounts.
“Over the last decade, the Central Bank of Kenya has championed financial inclusion supported by innovation in the financial services sector in Kenya, noted Prof Ndung’u. “As a result, the proportion of Kenyans who are unbanked has declined from 38.4% in 2006 to 32.7% in 2009 and 25% in 2013.”
The MasterCard Foundation Fund for Rural Prosperity will be managed by KPMG International Advisory Services. Initial applications for innovation proposals will be accepted from January 20, 2015 to March 20, 2015.
Later in the year, applicants will have the opportunity to submit proposals for scaling business ideas, products or services.
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