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The Madagascar Financial Inclusion project aimed at promoting the financial inclusion of individuals and micro-, small- and medium-sized enterprises, will specifically target women and women-owned enterprises to reduce disparities in access to finance for women.

The World Bank has approved a $45 million International Development Association credit for the project.

The direct beneficiaries of the project will include teachers, students and taxpayers that will have the option to receive and make government payments through an e-money transaction account.

Among other direct beneficiaries are also the microfinance institutions customers, particularly in rural areas.

Mobile money operators will benefit from increased use of their e-money services, as well as expansion of their agent network. Read more:Digital finance could accelerate financial inclusion

“With the expansion of telecom services across Madagascar, the country has a chance to expand financial services through the greater use of mobile money to people who had been under-served until then, be it the teacher who had to be absent from school to go and collect her salary or the farmer needing credit to buy seeds and fertiliser,” said Coralie Gevers, World Bank country manager for Madagascar.

Promoting financial inclusion

Gevers added: “The World Bank is proud to support the efforts of the authorities, the Central Bank of Madagascar, and financial services providers to promote a more inclusive access to finance.”

A 2016 Finscope survey found that 41% of adults in the country are fully financially excluded (equally, 41% of females), without access to formal or informal financial services.

According to the World Economic Forum Executive Opinion Survey 2017, access to finance was ranked second most problematic factor for doing business in Madagascar (after political instability).

The country ranks at 133rd place out of 190 countries in terms of ‘getting credit’ in the 2018 World Bank Doing Business.

This project also supports banks and microfinance institutions to supply credit to micro-, small- and medium-sized enterprises through a credit guarantee scheme and the application of financial technology (fintech) innovations.

Moreover, it encourages credit demand by productive enterprises through business development services for entrepreneurs and microfinance institutions branch expansions into underserved areas.