Making Access Possible (MAP) Madagascar

The island state of Madagascar has a largely agrarian population vulnerable to the extremes of nature: 72% of adults depend on agriculture, more than 4.2m adults experienced a climate-related shock in the past year, and at least 40% report being uncertain about whether they will have food going forward. Madagascar ranks 154 out of 188 on the human development index, globally, and the GDP per capita is only $402 per year.

In a largely vulnerable society such as this, the role of financial services to help weather shocks and to smooth and grow income is particularly pronounced. FinScope finds that 17% of adults who earn less than a dollar a day and who are financially excluded (no formal or informal financial services) indicated that they have missed a meal, could not send their children to school or have in the past been unable to pay their health costs. for those in the same income bracket that are financially included, the percentage drops to 8%. This indicated that being financially included makes a significant different to the likelihood of financial distress - and, from a public policy perspective, creates scope for protecting and growing household-level welfare. Moreover, financial inclusion serves the Malagasy government's broader macroeconomic development goals by growing the financial system to fulfil its optimal growth and development role. Effective financial systems can fuel employment generation and growth by mobilising savings and allocating capital for investment and business development, by reducing transaction costs and increasing efficiency in the economy. Effective financial systems can fuel employment generation and growth by mobilising savings and allocating capital for investment and business development, by reducing transaction costs and increasing efficiency in the economy.  

 

In May 2016, the Making Access Possible (MAP) financial inclusion diagnostic methodology and stakeholder engagement process was kicked off in Madagascar, implemented by Cenfri, in partnership with UNCDF and FinMark Trust. MAP was requested by the Ministry of Finance as inputs into their next round of its financial inclusion policy. Financial inclusion serves the Malagasy government’s broader development goals by helping people and businesses to meet key needs to weather shocks and maintain and grow their livelihoods, and by growing the financial system to fulfil its optimal growth and development role.

MAP builds on the efforts already undertaken by the Ministry of Finance and the Coordination Nationale de la Finance Inclusive (CNFI), established to coordinate financial inclusion efforts in Madagascar. In 2012, Madagascar signed the Maya Declaration, committing it to advance financial inclusion alongside peers from 80 other countries, globally. The targets set relate to microfinance, regulation and data to track financial inclusion. More recently, it adopted a National Strategy on Financial Inclusion for 2013-2017, focused largely on microfinance. The IMF Financial Sector Assessment Programme (FSAP) report of 2016 and the 2017 World Bank Aide Memoire on financial inclusion has provided important checkpoints along the way. MAP has now been requested by the Ministry of Finance as inputs to the next round of its financial inclusion policy. The full diagnostic should be available by the end of September 2017.

 

For more information, contact Jaco Weideman at This email address is being protected from spambots. You need JavaScript enabled to view it.

Additional Info

  • Country: Madagascar
  • Institution: Cenfri, FinMark Trust, UNCDF
  • Date Published: 2017
  • Document Type: Presentations
  • Author/s: Mia Thom, Jaco Weideman
 

Making Access Possible (MAP) Madagascar

The island state of Madagascar has a largely agrarian population vulnerable to the extremes of nature: 72% of adults depend on agriculture, more than 4.2m adults experienced a climate-related shock in the past year, and at least 40% report being uncertain about whether they will have food going forward. Madagascar ranks 154 out of 188 on the human development index, globally, and the GDP per capita is only $402 per year.

In a largely vulnerable society such as this, the role of financial services to help weather shocks and to smooth and grow income is particularly pronounced. FinScope finds that 17% of adults who earn less than a dollar a day and who are financially excluded (no formal or informal financial services) indicated that they have missed a meal, could not send their children to school or have in the past been unable to pay their health costs. for those in the same income bracket that are financially included, the percentage drops to 8%. This indicated that being financially included makes a significant different to the likelihood of financial distress - and, from a public policy perspective, creates scope for protecting and growing household-level welfare. Moreover, financial inclusion serves the Malagasy government's broader macroeconomic development goals by growing the financial system to fulfil its optimal growth and development role. Effective financial systems can fuel employment generation and growth by mobilising savings and allocating capital for investment and business development, by reducing transaction costs and increasing efficiency in the economy. Effective financial systems can fuel employment generation and growth by mobilising savings and allocating capital for investment and business development, by reducing transaction costs and increasing efficiency in the economy.  

 

In May 2016, the Making Access Possible (MAP) financial inclusion diagnostic methodology and stakeholder engagement process was kicked off in Madagascar, implemented by Cenfri, in partnership with UNCDF and FinMark Trust. MAP was requested by the Ministry of Finance as inputs into their next round of its financial inclusion policy. Financial inclusion serves the Malagasy government’s broader development goals by helping people and businesses to meet key needs to weather shocks and maintain and grow their livelihoods, and by growing the financial system to fulfil its optimal growth and development role.

MAP builds on the efforts already undertaken by the Ministry of Finance and the Coordination Nationale de la Finance Inclusive (CNFI), established to coordinate financial inclusion efforts in Madagascar. In 2012, Madagascar signed the Maya Declaration, committing it to advance financial inclusion alongside peers from 80 other countries, globally. The targets set relate to microfinance, regulation and data to track financial inclusion. More recently, it adopted a National Strategy on Financial Inclusion for 2013-2017, focused largely on microfinance. The IMF Financial Sector Assessment Programme (FSAP) report of 2016 and the 2017 World Bank Aide Memoire on financial inclusion has provided important checkpoints along the way. MAP has now been requested by the Ministry of Finance as inputs to the next round of its financial inclusion policy. The full diagnostic should be available by the end of September 2017.

 

For more information, contact Jaco Weideman at This email address is being protected from spambots. You need JavaScript enabled to view it.

Additional Info

  • Country: Madagascar
  • Institution: Cenfri, FinMark Trust, UNCDF
  • Date Published: 2017
  • Document Type: Presentations
  • Author/s: Mia Thom, Jaco Weideman
 

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