World Bank Group’s IFC and MasterCard have agreed to set up a $250 million risk-sharing facility aimed at providing millions of people in emerging markets access to electronic payments.
The risk-sharing facility is expected to provide alternative coverage and share the settlement risk of participating emerging market financial institutions and as well help them double the issuing of debit cards to lower income customers.
The $250 million facility will help the new financial institutions to join the MasterCard network while the existing will use it to grow their products, services and reach. It will also help move cash-based transactions into cashless.
In a statement, Ajay Banga, CEO and president of MasterCard said, “To reach MasterCard’s goal of an additional 500 million people connected to financial services by 2020, we must all roll up our sleeves and get creative in how we build public-private partnerships. This partnership with the IFC is a model for how we can create opportunities and remove barriers for banks to include more people in the financial fold.”
The deal will see the partners develop and deploy payments solutions suitable for financila institutions and customers in emerging markets in a move to enhance financial access in emerging markets.
IFC Executive Vice President and CEO Jin-Yong Cai said, “The facility is a key step in the World Bank Group’s efforts to support the development and expansion of private sector electronic payments in emerging markets and reach our goal of universal financial access.”
Cai added that the move will benefit individuals and small businesses by improving the availability of non-cash financial services, which are safer, more transparent and more efficient than cash.