Ideas & Updates

The International Fund for Agricultural Development joins Better Than Cash Alliance

© Michael Hamp/IFAD

The International Fund for Agricultural Development (IFAD) is pleased to accept an invitation to join the Better than Cash Alliance (BTCA) in our shared commitment to bringing financial access to rural communities through digital payments.


Andean tribal people who participate in the Financial Graduation Programme by PLAN Peru in Cusco. Peru is a world leader in mobile phone and agent banking.

We welcome this membership because we know the tremendous impact that digital payments can have on the national economies of our developing partner countries, allowing millions of rural people to gain access to the formal financial sector.

As a specialized agency of the United Nations, IFAD works to enable rural poor people to improve their food and nutrition security, increase their incomes and strengthen their resilience. BTCA is a perfect fit for us because we are one of the world’s largest lenders supporting rural finance for poverty reduction, promoting access to a range of financial services, including savings, payments, remittances and insurance, to meet the needs of poor people, and we recognize the critical role of electronic payment systems in accessing all of these tools.

In 2013, there were 2.5 million active borrowers from IFAD-assisted microfinance institutions, 74 percent of which were women, as well as 5.5 million voluntary savers, 71 percent of which were women.

By joining BTCA, we commit to expanding these numbers by promoting electronic payments, which are a gateway to accessing other financial products like loans and savings accounts. Central to our partnerships with developing countries are IFAD’s results-based country strategic opportunities programmes (COSOP), which provide a framework for IFAD operations in a country, ensuring that they produce a positive impact on poverty. A COSOP also highlights the innovation that IFAD intends to promote in the country and how we will bring a tested innovation to scale – this is where electronic payments come in. As a BTCA member, we will encourage the use of affordable and accessible electronic payment and collection methods for low-income communities in all future rural finance projects and project components and assist partner governments to develop the infrastructure and market to support them.

We will help communicate to our partner countries the benefits of a cash-less system, including cost savings, economic development, as well as increased transparency, security and financial inclusion for more citizens who can in turn access critical financial tools. But of course, the benefits of electronic payments do not stop there.

IFAD also joins BTCA serving as implementing partners of the G20 Global Partnership for Financial Inclusion under the Sub-group on Markets and Payments Systems. Here, we’re working to leverage the impact of remittances for development – particularly in rural areas – in order to promote digital financial inclusion.

At a time when global efforts are in place to maximize the development impact of remittances, it is strongly believed that digitalization of flows, combined with financial intermediation, will pave the way to an expanded remittance market and reduced transaction costs. We have seen the cost of sending money drop from 12 percent to around 8 percent over the last decade – currently at US$37 billion – due to increased competition, enhanced regulatory reform and stronger advocacy at international and national levels. Digitalization of flows, which facilitates the expansion of remittance services, particularly in rural areas, is one of the strongest enabling factors of this downward trend.

These trends, as well as commitments from our developing country partners to implement electronic payment systems, will be instrumental in reaching the post-2015 sustainable development goals on financial inclusion. By partnering with BTCA, we hope to share our experience with a global network of partners working at the frontier of innovation, and continue to grow in our mission to bring financial inclusion to rural poor communities.