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MasterCard launches 50 mln USD fund to help small holder farmers

Xinhua, January 20, 2015 Adjust font size:

The MasterCard Foundation on Tuesday launched a 50 million U.S. dollar fund that is aimed at increasing the ability of small holder farmers in 24 African countries access financial services.

The MasterCard Foundation Director of Financial Inclusion Ann Miles told a media briefing in Nairobi that the fund will offer grants to private sector firms that benefit the rural small scale farmers.

"Our target is that by the end of seven years, at least one million rural farmers have access to affordable savings, credit and insurance products," Miles said.

Some of the beneficiary countries include Burundi, Benin, Cameroon, Ethiopia, Gambia, Kenya, Ghana, Liberia and Mali.

She said the MasterCard Foundation Fund for Rural Prosperity will support innovative ideas that have the potential to grow to scale and have a deep social impact on the lives of rural people living in poverty.

The fund will operate under two categories. "It will consists of a 15 million dollar innovation fund to support the development of ideas for new products and a 35 million dollar fund to help scale up the most promising ideas," she said.

She added that a majority of the rural households in Africa remain financially excluded.

"In fact approximately 70 percent of these families derive a large portion of their income from agricultural activities," she said.

According to MasterCard Foundation, many financial services providers lack the knowledge and capacity to develop appropriate products that would make small holder farmers become financially included.

MasterCard Foundation Non-Executive Director Jendayi Frazer said financial institutions consider small scale farmers a credit risk.

"The fund will therefore work to develop interventions to address this market failure," Frazer said.

Equity Bank Chief Executive Officer James Mwangi said banks shy away from extending credit to farmers who depend on rain fed agriculture.

"This is because the erratic weather patterns increases the likelihood of crop failure," he said. Endi