The MasterCard Foundation is ramping up support for efforts to increase financial access in rural parts of African countries, and this funding is not taking place in a vacuum. The MasterCard Foundation, with huge assets of $9 billion, is an independent entity without a single MasterCard executive on its board. But its financial work in Africa syncs up nicely with the efforts of Mastercard, the company, to nurture a cashless society as the African continent continues its economic rise. (African consumers will be spending $1.2 trillion a year by 2020, according to McKinsey & Company.)
The MasterCard Foundation recently entered a $22.7 million, five-year partnership with Opportunity International to increase financial access for more than two million people living in rural parts of Tanzania, Ghana, Malawi, Uganda, and Rwanda. This follows a 2009 $16 million partnership with Opportunity International that provided more than one million people access to financial services.
While The MasterCard Foundation focuses on supporting access to financial services in rural Africa, the foundation is succeeding in supporting access to financial services in the city. The company developed an African Cities Growth Index to rate the opportunity in 19 of Africa's most promising cities. It's acting on that data with initiatives like the National Identity Management System in Nigeria, a fascinating endeavor to provide 13 million Nigerian identity cards with embedded MasterCard payment capacity. It is also working with Ghana and Kenya to develop local payment systems.
The way this plays out sounds like Mozart. The urbanization story on the African continent continues, with projections of upwards of 60 percent of the continent's population residing in cities by 2050. MasterCard is pushing for a good portion of those people to be using MasterCard technology to pay for the bus trip to the big city. As for those who stay in the village, MasterCard wants to be sure they are using its products as Africa's agricultural production reaches McKinsey & Company's prediction of $880 billion in output by 2030.
Thus, the foundation's interest in driving down poverty while prepping for huge future revenue growth. That's not a bad gig at all.
And, we should note, The MasterCard Foundation's work on rural financial access isn't the only thing it's doing in Africa. The foundation's Scholars Program is a huge, $500 million initiative to help young Africans, at both the secondary and college level, get access to quality education, including attendance at top universities in the United States.
Why the big focus on Africa? The MasterCard Foundation says it prioritizes Africa because the "continent is home to the world’s youngest population, seven of the 10 fastest growing economies, and an emerging movement of entrepreneurs. There are now 600 million people under the age of 25."
Those sound like good reasons to us, whether you're running a foundation or a credit card company.