Smallholder farmers in Africa face a number of challenges including the lack of land rights, gender inequality, transportation problems, and spoilage issues. Another glaring problem is that a comparatively low percentage of smallholder farmers have access to financial products and services. This can, and often does, serve as an impediment to increased economic stability.
The MasterCard Foundation is keenly aware of the obstacles faced by smallholder farmers in Africa, so earlier this year, it launched a $50 million Rural Prosperity Fund. The fund aims to help 1 million of Africa’s rural poor population escape the poverty cycle by improving their access to financial products and services. The foundation dedicated $15 million to its Innovation Competition, which supports the development of innovative ideas for financial products and services that are accessible to the rural poor in Africa. The remaining $35 million was committed to the fund’s scaling competition, for which the official opening was recently announced by the foundation.
The scaling competition will focus on growing the most promising ideas and pilot programs that foster financial inclusion efforts specifically geared toward smallholder farmers in Côte d’Ivoire, Ghana, Kenya, Mozambique, Senegal, Tanzania, Uganda, and Zambia.
The overarching principles of the foundation’s Rural Prosperity Fund are not simply to provide people with access to savings and checking accounts. Taking a more holistic approach, The MasterCard Foundation hopes to support the development and scaling of models that enable financial service providers and agribusinesses to grow; encourage new customers to enter the formal financial systems, with a particular focus on agribusinesses; and developing a deeper understanding of customer needs.
The Rural Prosperity Funds plans to offer two competitions per year—one innovation and one scaling competition—until 2017, after which time the fund will dedicate its support to the monitoring and evaluation of winning projects.
The MasterCard Foundation—which is a separate entity from MasterCard Worldwide—has been heavily involved in promoting global financial inclusion in developing countries for a while now. Although the foundation does support related work in developing countries in Asia and Latin America, it typically prioritizes its program giving and partnerships in Africa.
In addition to its financial inclusion work in Africa, The MasterCard Foundation has also supported programs that promote access to high-quality education at the secondary and post-secondary levels, as well as job training and skills development programs.