In spite of developing and implementing more and more modern financial services in the world, there are still 2,5 billion of people who are excluded from a formal financial system. They have no access to basic financial services which results in the fact that they are forced to pay only in cash. It is how the economic situation looks like i.a. in East Africa.
MasterCard company announced the launching of MasterCard Labs for Financial Inclusion initiative, the aim of which is to support over 100 million people all over the world through creating cheap financial tools. Bill & Melinda Gates Foundation joined the action by offering the amount of 11 million dollars. The laboratory will generate new ideas in East Africa with the participation of local entrepreneurs as well as the ruling people and then it will change from the concept phase to its realization.
The fact that too many people do not have access to the most basic financial services results in their economy confinement based on cash which imposes higher risk and costs on those who certainly cannot afford this – comments Ajay Banga, chairman and CEO in MasterCard. – Thanks to the investment made by Gates Foundation as well as our effective innovation processes, MasterCard is going to create and implement services which give people the possibility to use financial services and thus help them to build better and brighter future.
Gates Foundation, which cooperates with the private sector, non-governmental organizations and governments, aims at directing available financial means and stores of knowledge to solve important problems which cannot be dependent only on activities of market powers. Thanks to the offered donation, the foundation would like to provide financial services to people whose economic living is much more hampered, confined by local factors and excluded on the institutional level. The donation enables MasterCard company to reach the markets where the providing of support was not economically possible in the past.
The laboratory, which is being built in Africa, will be the part of MasterCard Labs – a global research and development section which concentrates on the evolution of technological and consumer trends.
Gates Foundation is going to transfer 11 million dollars to MasterCard company within three years on research and development works, whereas MasterCard will be financing the current activity of the laboratory. The contract envisages additional 8 million dollars on development of ideas evolving to the stage of incubation in order to create an opportunity for each startup to achieve a commercialization stage and become a part of a new economy. MasterCard is going to run MasterCard Labs for Financial Inclusion in a way which provides a global access. Thanks to it, the results obtained in the laboratory will bring real benefits to poor people and find wide application with the possibility of promotion certain solutions on a regional scale and possibly on a world scale in the future.
Works taken up in MasterCard Labs for Financial Inclusion will lead to production of new goods and services for the poor which use existing as well as new infrastructure elements, including also those which are not related to the specific character of MasterCard activity. The results will be widely used for the public good. Products and services which come out of the laboratory, in turn, will be based on standards providing the maximal flexibility and creating the possibility to local deliverers of financial services to act for the benefit of poor people in developing countries.