World Bank’s private investment arm has entered into a partnership with a credit card company to help extend financial services to low-income earners.

The International Finance Corporation (IFC) and the MasterCard Foundation on Monday signed a $37.4 million deal to help micro-finance institutions and mobile money providers to expand and diversify their services.

They have set a target of increasing micro-finance services to 5.3 million people in sub-Saharan Africa within the next five years.

The deal represents IFC’s largest partnership with a private foundation.

“We will work with existing mobile finance service providers and micro-finance institutions to help reach low-income customers,” said IFC senior manager, Mr Peer Stein, during a video conference in Nairobi.

Two thirds of the funds will be used to accelerate expansion of micro-finance while a third will go into mobile financial services.

However, the corporation revealed that partnerships with Kenyan mobile money providers would be unlikely since the market is already saturated.

Twenty-seven microfinance institutions in 14 African countries are currently being vetted to benefit from the deal.

The corporation invested $200 million in the East African region in 2011, about half of which went to Kenya, and has a similar target for 2012.

Courtesy: Daily Nation