Over 500,000 female entrepreneurs in Nigeria are to be introduced to electronic payments under a new partnership agreed between MasterCard and local microfinance institution Grooming Centre.
The Grooming Centre provides affordable microfinance loans to women running micro, small and medium enterprises (MSMEs) in Nigeria.
The partners signed a memorandum of understanding (MoU) agreeing that new loans to be disbursed by the Grooming Centre will be in the form of a pre-loaded MasterCard prepaid card, instead of the usual cash or cheque payments made to date.
The initiative is launched in a bid to introduce MSMEs to financial services, and the benefits and efficiencies of electronic payments. The partners hope the initiative will contribute to improving financial inclusion in Nigeria.
“There are a huge number of MSMEs that do not have access to any form of formal financial tools or services. Through the provision of electronic payments, these business owners will enjoy more convenient access to capital, be able to better manage and track their spending, save for future needs and protect themselves against unforeseen risks,” said Godwin Nwabunke, chief executive officer (CEO) of Grooming Centre.
Business owners will be able to use their cards to withdraw funds at millions of ATMs, or to pay for goods and services at MasterCard-accepting merchants worldwide.
In addition to launching the prepaid cards, MasterCard and the Grooming Centre have committed to working together with local financial institutions to roll out mobile point of sale (PoS) payment devices, enabling MSMEs to process electronic payments.
“Through this partnership, we will enable financial inclusion in communities where consumers have largely been unable to use formal payment products and have had to rely on cash,” said Omokehinde Ojomuyide, vice president and area business head for West Africa at MasterCard.
“These payment solutions will help these MSMEs reduce the amount of cash they currently handle, increase sales, and improve cash flow while making it easier and safer for their customers to pay.”
Citing research conducted by the SME Development Agency and the National Bureau of Statistics, the partners said their focus on bringing financial services to MSMEs reflects the fact that 95 per cent of Nigeria’s registered businesses, and account for 75 per cent of the country’s workforce.
“MSMEs are essential to the growth of Nigeria’s economy. Our collaboration with Grooming Centre not only supports the Central Bank of Nigeria’s Cashless Nigeria policy, but it will help this vital sector to connect more efficiently to the national and global economy,” said Ojomuyide.