Malawi, alongside 24 other African countries from the sub-Saharan region, stand to benefit from the MasterCard Foundation – Fund for Rural Prosperity’ three year $15 million (K10.98 billion) Innovation Competitions Support Start-up project.
The MasterCard Foundation – Fund for Rural Prosperity technical advisor Gabriel Kivuti disclosed this during the Innovation Competition Information Workshop on Tuesday in Blantyre.
The majority of rural households in Africa, including Malawi, remain financially excluded with over 70 percent of families in sub-Saharan Africa serving a large portion of their income from agricultural services.
In developing countries such as Malawi, access to financial services to low income households such as savings, insurance services, small loans and remittances enables them to benefit from economic opportunities to build up income and assets to lift them out of poverty.
Malawi performed poorly on the 2015 Brookings Financial and Digital Inclusion Project (FDIP) Report and Scorecard ranking on position 19 out of the 21 countries surveyed.
A 2014 Finscope survey indicated that the population accessing banking services jumped by 14 percent within five years to 54 percent from 45 percent in 2008.
Traditionally, financial inclusion has been on the concept of expanding banks and non-banking financial institutions footprints through brink and motor, key being the spread of presence beyond major cities where financial institutions are mainly concentrated.
Through the Fund, MasterCard seeks to reach one million financially excluded people in rural and agriculture areas in the Sub-Saharan region by offering grants between $250 000 to $1.5 million (about K181 million to K1 billion).
“The main purpose of the fund is to address financial inclusivity among smallholder farmers (SHFs) and rural dwellers within the region so as to ensure that people who live in rural areas are able to access financial services.
“We expect to award the grants to the private sector profit-making companies whose products or services can change rural financial services as well as target financially underserved markets,” he said.
In 2015, the fund awarded nine financial service companies from the region a total of $6.9 million (about K5 billion) to move their ideas from conception to implementation, but Malawi failed to qualify.