“Anytime you work with a foundation like MasterCard, Caterpillar or Gates, they push you to think better and harder.”
That’s according to Vicki Escarra, CEO of Opportunity International, a global nonprofit that provides loans, savings programs, insurance and training to more than 5 million clients in 22 countries across Africa, Asia, Latin America and Europe.
OI announced on Tuesday a five-year $22.7 million project in partnership with The MasterCard Foundation, the second largest grant in the NGO’s 42-year history.
Escarra told Devex the “Africa Growth and Innovations Initiative” will expand unique delivery channels in Ghana, Uganda, Rwanda, Malawi and Tanzania, with a focus on low-cost branches and mobile banking to drive increased savings outreach and expand financial services for smallholder farmers to increase crop yields, productivity, income and food security.
But the grant won’t only benefit smallholder farmers in rural Africa.
OI, Escarra explained, benefitted as a whole from the year-long due diligence process with MasterCard — and is now thinking of bigger, more scalable projects.
“They asked us thousands of questions about our business,” Escarra said. “What we found in working through the due diligence with them were ways that we could stretch the organization to do even more.”
OI staff members in the field — as well as in the United States and Canada — have been working on this together for more than a year, and personnel and board members of The MasterCard Foundation accompanied them on five field visits to look at and learn from current work.
“We didn’t send them a recommendation that said: ‘We want to focus on smallholder farmers and mobile tech,’” Escarra said. “It was a very rigorous process to decide focus areas that included many iterations and many site visits.”
Branchless banking
MasterCard wanted to focus on loans that would provide seed and crop insurance and training as well as mobile and branchless banking in areas where OI doesn’t have — or intend to have — brick and mortar banks.
So in this case, the initiative will pilot a branchless banking model to more than 100 farmers in southern Tanzania, who will be able to use mobile technology to access financial services and training.
“The intention of using a phone to sign up for a loan can be a little unusual … so it’s great to see that MasterCard likes this kind of innovation,” Escarra said.
OI will staff the program over the next five years with a very strong focus on agriculture and tech, and the grant will allow them to “staff up a bit for more focus on the ground.”
For pilots such as the one in Tanzania, for example, the nonprofit will move the head of mobile money to be on the ground to observe progress. If it’s successful, Escarra explained, OI would be able to reduce its costs exponentially and people would be able to access their services with a high degree of growth, without building a bank.
“The potential to take it to scale is phenomenal and would mean a sea change for the organization,” Escarra said. “It’s something we could easily replicate in other parts of the world, and MasterCard wants us to do that. They want to support creativity and innovation that is scalable.”
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