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A key factor to be more successful in scaling the microfinance industry efficient is to use the power of IT technologies which already thousands of MFIs recognized. Technology is essential to reach new peope, controlling risks make the business sustainable and more effective due to the costs. With mobile phones, ATM machines and other new innovations the possibilities are unlimited to provide financial services more efficient to poor people. Once improved the technology more “unbankable” are reached. Despite the big potential, there are still not enough MFIs reaching scale. |
Access to affordable telecommunications simply does not exist for millions in the developing world. For some, placing a phone call can require traveling over six miles from their homes. This can mean leaving work and losing out on desperately needed income. Cut off from easy access to communications, these communities are at both an enormous economic and social disadvantage.
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“Point Of Sale” (POS) terminals can be computers, bank card readers or even mobile phones. Already many MFIS are using those tools to conduct business with their clients. POS terminals enables money transfers, bank transactions from balance inquiries, bill and loan payment, cash withdrawal and deposits. |
Using POS terminals Is much more cheaper than building brick and mortar branches everywhere in order to reach the huge demand. Although they need staff to operate the terminal, it´s cheaper than staff a bankoffice. The technology is already something we can use today, it does not have to be innovated. The mobilephone is the most used tool today, villages that don´t even have a telephone line now can be reached. That’s why the most applications for microfinance also are innovated to work together with mobilephones. Solarenergy systems are developed to charge the mobilephones in the villages where they even lack traditional power grid.
ACCION International are using a system called “PortaCredit” and the “Mifa” system innovated by Grameen aiming to make heavybusiness transactions to clients cost less and be more efficient.
While the client always in the end have to pay for all costs, microfinance need to bring costs down even though its enabling and empowering with personal contact with the clients. Their time has to be used effective to improve the process. MFIs want to provide their financial services to clients with the same quality of products and services that clients receive from other service providers.
When putting together microfinancial knowledge and technological knowledge, two different branches, a totally new area of innovations can arise creating new business opportunities. It´s also about helping the individuals to understand the power of technology and how they can benefit from it.