A few years ago, the MetLife Foundation launched a $200 million campaign to support financial inclusion efforts in underserved communities in Asia, Europe, Latin American, the Middle East, and the United States. Since then, the foundation has been moving money through its relatively new financial inclusion program at a brisk pace, and has been picking up some heavy-hitting partners along the way.
The MetLife Foundation has partnered up with Bankable Frontier Associates and Rockefeller Philanthropy Advisors (RPA) to develop a program that will help microfinance institutions (MFIs) better serve their clients. The program, Optimizing Performance Through Improved Cross Sell, or OPTIX, launches in just four MFIs and co-ops located in Mexico, Columbia, Bangladesh, and Vietnam.
The OPTIX program will help the chosen MFIs, which includes Cooperativa Acriemex (Mexico), Banco WWB (Columbia), SAJIDA Foundation (Bangladesh) and Capital Aid Fund for Employment of the Poor (Vietnam), introduce financial products to the clients it serves, as well as help them secure the MFIs positions against larger competitors. It's a win for both sides of this banking coin as smaller, local institutions are often better able to address the needs of the communities in which they operate.
When speaking of the new partnership, Dennis White, President and CEO of MetLife Foundation said, “MetLife Foundation is excited to be a part of this initiative because of its ability to meet nearly one million clients’ holistic financial needs, and increase the sustainability of the institution serving them.”
When it comes to the world’s unbanked and the MFIs that hope to serve them through financial inclusion efforts, sustainability is a linchpin issue. Over two billion adults around the world do not use formal banking systems to save or borrow money. A big portion of that population lives on very little income—often less than $5 per day—so it’s comparatively expensive for MFIs to service these accounts. In order for these small institutions to keep their doors open and advance financial inclusion efforts, they must turn at least enough profit to sustain their businesses.
Since launching its financial inclusion campaign, the MetLife Foundation has really been dialed-in to the fact that access to formal banking systems is a powerful tool to help lift families out of poverty—and it has some pretty powerful friends in its corner.
In addition to Rockefeller Philanthropy Advisors and Bankable Frontier Associates, MetLife has also partnered up with the Wall Street Journal for its “Financing the Future” program, a major editorial initiative in which the paper will provide news, statistics, and other insights into the billions of people who are currently excluded from the world’s formal banking systems.
Unlike its joint effort with RPA and Bankable Frontier Associates, the MetLife and WSJ partnership isn’t providing financial inclusion services directly to the poor. Instead, it aims to encourage other for-profit and nonprofit outfits to submit proposals that offer both innovative and sustainable solutions for financial inclusion.
We have to say, the MetLife Foundation’s dive into financial inclusion has been pretty impressive so far—especially since the foundation has only been in this grantmaking for a relatively short time.