Mastering Possibilities in Microfinance

December 10, 2011

The MasterCard Foundation and the UN Capital Development Fund (UNCDF) are expanding efforts to make microfinance services, especially savings, more available to low-income individuals in Sub-Saharan Africa.

MicroLead was created in 2009 with funds from the Bill and Melinda Gates Foundation. MasterCard and the UNCDF have committed to the next phase of the project, which targets 450,000 low income folks in underserved African markets.

UNCDF is a capital investment fund that focuses on the world's 48 least developed countries in Africa and Asia. The MasterCard Foundation is a charitable arm of the international credit card company MasterCard.

Recent studies suggest that poor people are active savers. A statement from MasterCard and UNCDF announcing the next phase of MicroLead said that in some countries the opening of savings accounts outpaces loans by a factor of 12. One of the tasks UNDCF is undertaking in the next phase of MicroLead is to test if a savings-lead approach creates a stronger and more resilient financial services market.

"We believe that the fight against extreme poverty through building inclusive financial sectors needs innovative approaches and strong partnerships," said David Morrison, UNCDF Executive Director.

"By helping microfinance institutions to develop savings and other financial services that promote financial inclusion for the poor, the MicroLead program is not only building capacity, but also increasing access to financial services to nearly half a million clients in Africa," said Reeta Roy, President and CEO of the MasterCard Foundation.

250 microfinance institutions made loans to Americans in 2007.