He spoke in a homily of a Mass on a sprawling field on the outskirts of the capital Antananarivo for hundreds of thousands of people, many of whom had spent the night outdoors in unseasonably cool weather. The Vatican said local organizers had estimated the crowd at about a million people.
As he has since the start of his three country swing through sub-Saharan Africa, Francis spoke out about the gap between the haves and have-nots on the continent. He has already visited Mozambique and will move on to Mauritius on Monday.
Francis decried a clan culture that provided a boost only to those connected to it while leaving many others permanently excluded, or at best marginalized without opportunities to improve their lives.
"When 'family' becomes the decisive criterion for what we consider right and good, we end up justifying and even 'consecrating' practices that lead to the culture of privilege and exclusion: favoritism, patronage and - as a consequence - corruption," the pontiff said in his homily.
Madagascar is the world's fourth largest island and one of its poorest countries.
The U.N. World Food Programme estimates that more than 90% of Madagascar's 26 million population live on less than $2 a day, with chronic child malnutrition widespread.
Corruption is rampant among the country's political and business class, according to organizations such as Transparency International, which ranks Madagascar in the lowest quarter of its global Corruption Perceptions Index.
"As we look around us, how many men and women, young people and children are suffering and in utter need!" the pope said.
While in Antananarivo, Francis's motorcade passed by people plying trades like metalworking and carpentry on the sides of dusty roads, followed minutes later by walled-off, European-style villas with gardens and pools.
Francis has often called for greater income equality and a fairer distribution of wealth between prosperous and developing countries, and he has defended the right of countries to control their mineral resources.
After the Mass, Francis was due to visit Akamasoa, a district of the capital known as "The City of Friendship."
It was founded by Father Pedro Opeka, a 71-year-old missionary who studied theology under the future pope in their native Argentina before dedicating his life to building communities for the families of Madagascar.Over the last 50 years, an organization founded by Opeka has built homes for 25,000 people, 100 schools, six clinics and two football stadiums. Next year they plan to build a college for paramedics.