The MasterCard Foundation Expands Savings Services for the Poor
TORONTO, Feb. 25, 2009 — The MasterCard Foundation has announced two new programs to expand savings initiatives in Tajikistan and Rwanda with Aga Khan Foundation Canada and CARE Canada. With a total investment of $9 million, these programs will strengthen and create innovations within the Village Savings and Loan Association (VSLA) model, benefiting approximately 900,000 people in remote communities, many of whom live on less than $2 a day.
VSLAs are self-managed savings groups that receive no external funding. The accumulated savings within each group is made available in small loans to members. Each group sets its own rules about membership, savings and loans. The model, pioneered by CARE in 1991 in West Africa and adapted over the years, has proven to be a cost-effective means to ensure poor populations have access to appropriate financial services.
"The MasterCard Foundation aims to help the poor, especially those in isolated places, save money and build assets," said Reeta Roy, President and CEO of The MasterCard Foundation. "Working with leaders like Aga Khan Foundation Canada and CARE, our programs will create economic opportunities for people to improve their own lives."
Over the next five years, Aga Khan Foundation Canada will adapt and introduce VSLAs to the mountainous regions of Tajikistan, benefitting more than 350,000 people. Based on local needs, this $5 million program - $4 million from The MasterCard Foundation and $1 million from Aga Khan Foundation Canada - will help villagers identify and develop viable businesses and connect them to markets.
"Working with The MasterCard Foundation, we will offer poor rural households new ways to manage their cash and invest in income-generating activities," said Khalil Z. Shariff, CEO of Aga Khan Foundation Canada. "This initiative will be an important aspect of our long-term, holistic effort in Tajikistan and will inform our plans to introduce VSLAs across ten other developing countries."