MEDA joins the Better Than Cash Alliance: Pledges to improve access to finance and markets for the poor by supporting shift to electronic payments
Mennonite Economic Development Associates (MEDA) announced that it has joined the Better Than Cash Alliance by committing to support the transition of a significant volume of payments from cash to electronic through its work with partners in improving financial services and market systems for the poor.
“For more than 60 years, MEDA has been helping millions of poor people by creating sustainable business solutions to poverty and providing them with access to finance and markets,” said Allan Sauder, president of MEDA. “Electronic payments are an important component of our services, providing people with a secure, quick and cheap means of accessing their savings. Joining the Better Than Cash Alliance will allow us to be part of the collective effort to make these types of electronic payments more widely available, especially to the poorest and most underserved communities around the world.”
The shift to electronic payments in programs that currently distribute cash or in-kind goods to the poor, or to provide access to other financial services, can result in significant cost savings, transparency, security, and economic growth. For example, a recent report by the World Bank found that governments can save up to 75 percent of costs by shifting to electronic payment programs.1
The Better Than Cash Alliance, an initiative founded by the Bill & Melinda Gates Foundation, Citi, Ford Foundation, Omidyar Network, USAID, U.N. Capital Development Fund and Visa Inc., works with governments, the development community and the private sector to adopt the use of electronic payments and provides resources to those who commit to make the transition.
Today 2.5 billion adults – more than half of the world’s adult population – are excluded from the formal financial sector. This is most acute in the developing world, where approximately 80 percent of poor people are excluded. As a result, most poor households have no option but to subsist almost entirely in an informal, cash-only economy, making it extraordinarily difficult for them to access financial services like savings accounts, credit, or insurance. Electronic payments can create lasting benefits for people by creating opportunities to access formal financial services and payments and thus begin to build assets and save for the future.
“We commend MEDA on their leadership and commitment to empower poor individuals and entrepreneurs by transitioning to electronic payments in its inclusive financial services and market development initiatives around the world,” said Dr Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance. “There are many benefits of electronic payments but also challenges and these can best be tackled in partnerships. We welcome MEDA into the Better Than Cash Alliance and look forward to our partnership with them.”
MEDA joins the governments of Afghanistan, Colombia, Kenya, Peru and the Philippines along with development organizations USAID, the United Nations Development Programme, the World Food Programme, Mercy Corps, ACDI/VOCA, CARE USA, Chemonics International, Grameen Foundation and Concern Worldwide, which have committed to digitize their disbursements and payments to people living in poverty, thereby becoming eligible members for technical and financial support from the Better Than Cash Alliance.