The Future of Financial Services for the Unbanked, African Mass Market

What is the next step to bring financial services and products to the unbanked, mass market in Africa and around the world?

Today in Antananarivo, Madagascar, Microcred and the MasterCard Foundation announced a partnership that provides a response to this challenge — the Mass Market Financial Inclusion Program. Our goal is to reach over 1 million previously unbanked clients through agent banking and technology-enabled products in Madagascar, Senegal and Ivory Coast. See the press release here.

What is the financial inclusion challenge?

Let’s take a deeper look into this challenge. Madagascar is a country where Microcred has developed deep roots with 35 branches and provides financial services to the people since 2006. Microcred Bank Madagascar (MBM) serves approximately 115,000 Malagasy. However, it remains a country where the majority of the population is unbanked and does not have access to savings, credit, insurance or payment services. Looking at the national context, 5% of the population has an account, 2% borrowed a loan and 3% have saved with a financial institution according to the World Bank’s Global Findex survey from 2014 (for data on all of the program countries, see the table below). In addition, there are some serious structural challenges to overcome in order to reach clients in all of the program countries—for example, just 16% of roads in Madagascar are paved!

There are millions of still unbanked Malagasy, Senegalese and Ivorians who can simplify their lives and improve their living conditions through Microcred’s products and services.

Now how can we reach them?

Baobab by Microcred is a banking network of around 1,000 points of service in Senegal and Madagascar (soon to be deployed in Ivory Coast) that brings financial services directly into the client’s community. This means that clients reduce the amount of precious time and money they spend traveling to deposit hard-earned money into a savings account or repaying their loans — very important, especially in countries where the road network is so poor. Along with moving our services out of the branches and closer to our clients, Microcred is developing a range of new client-centered products and services that capitalize on the use of smartphones and tablets.

Currently, Microcred has deployed a mobile application that field staff can use to sign up new clients for an account. In order to improve the efficiency of loan applications Microcred has also launched a mobile application for loan officers to collect client data, including their geolocation, and submit a client loan application directly from the client’s business or home. In the coming months, Microcred will also launch bill payment, nano loans and pay-as-you-go products in addition to a mobile application for clients to manage their accounts.

To stay in touch with Microcred Bank Madagascar, like their facebook page Baobab by Microcred — Madagascar and look out for their new website in the coming months.

For more information about the MasterCard Foundation, visit their site here: www.mastercardfdn.org