by Steven Craig -

MICROCAPITAL STORY: International Finance Corporation, Consultative Group to Assist the Poor and VISA International Organize Microfinance Technology Conference

NEXT GENERATION ACCESS TO FINANCE: GAINING SCALE AND REDUCING COSTS WITH TECHNOLOGY AND CREDIT SCORING – SEPTEMBER 17-19, 2007, WASHINGTON, D.C., USA

The International Finance Corporation (IFC), a member of the World Bank Group dedicated to private sector development and the Consultative Group to Assist the Poor (CGAP), a consortium of public and private development agencies working together to expand access to financial services for the poor in developing countries, are working together with VISA International, a global card services and payment processing provider, to organize a microfinance technology conference entitled, “Next Generation Access to Finance: Gaining Scale and Reducing Costs with Technology and Credit Scoring.”

by Steven Craig -

MICROCAPITAL STORY: Technology Review Names Tapan Parikh 2007 Humanitarian of the Year for His Work on Mobile Phone Technologies Designed for Microfinance and Rural Development

Technology Review, an independent media company owned by the Massachusetts Institute of Technology, has named Tapan Parikh its 2007 Humanitarian of the Year for his work on mobile phone technologies geared toward microfinance and other rural development initiatives. Mr. Parikh, a doctoral candidate in computer science at the University of Washington, was honored in Technology Review’s 2007 report, TR35, which showcases the technological achievements of pioneering innovators under the age of 35.Mr. Parikh’s innovation is CAM, a framework of mobile tools that integrate through the use of a camera-enabled mobile phone. The CAM framework uses the mobile phone to capture images, scan documents, and to record and transmit financial transaction data.

by the MicroCapital Team -

CGAP Announces Its 9 Technology Picks

CGAP, the World Bank associated microfinance agency, announced its nine technology partners. Quoting the CGAP press release, the chosen nine are as follows:

Project Ideas Selected from Concept Notes Received:

1. Colombia: Credibanco VISA provides credit and debit card transaction acquiring to banks in Colombia through 53,000 points of sale and a telecommunications network that connects in real time to 17 principal cities of the country and 385 municipalities.

CGAP is planning a project with Credibanco to test whether a third party provider can use its merchant network to provide financial services on behalf of banks. Credibanco also plans to extend its existing merchant network to reach 250 additional municipalities that are currently unserved by bank branches. Banking agents in these municipalities will offer a full set of financial services on behalf of VISA member banks using POS and card-based technologies.

Continue reading “CGAP Announces Its 9 Technology Picks”

by the MicroCapital Team -

Gates Foundation Grants USD 24mn Over 5 Years to Consultative Group to Assist the Poor (CGAP) to Promote Microfinance Technology

The Consultative Group to Assist the Poor (CGAP), a World Bank associated agency for international microfinance, announced its partnership with the Bill and Melinda Gates Foundation, including a USD 24 mn grant spread over five years to pilot technologies for increasing access to financial services for the global majority.

CGAP technology expert Gautam Ivatury hopes that technology breakthroughs will provide incentive for more commercial banks to serve the rural poor. CGAP capitalizes on the now prevalent mobile phones throughout the impoverished areas to reach those who are “unbanked” due to barriers such as weak institutions, ineffective aid, and inappropriate policies and regulations.

Continue reading “Gates Foundation Grants USD 24mn Over 5 Years to Consultative Group to Assist the Poor (CGAP) to Promote Microfinance Technology”

by the MicroCapital Team -

Call for Technology Projects from Microfinance Leader CGAP

CGAP is the World Bank’s microfinance arm. It is the leading research and policy shop in this fledging industry badly in need of the World Bank’s research muscle (the World Bank employs the most PhDs in the world). In this way, we very much look forward to the outcomes of CGAP’s recently announced technology program. We encourage you to apply if you have the best technology in the industry, or simply aspire to the same.

“CGAP is launching a major technology program that offers grant funding and technical advice for microfinance institutions, credit unions, banks, mobile operators and other organizations. We are interested in proposals of ideas that promise to help
improve a business model, increase efficiency or expand outreach.

The Technology Program invites concept notes for projects that test technology-based approaches to delivering financial services, especially in the most challenging markets not yet reached by microfinance. For example, project ideas could include partnerships with companies offering alternative distribution channels such as electronic payment networks, statistical scoring models for credit appraisal, or the deployment by banks of ATMs in low-income areas alongside branches. The deadline for the first round of proposals is January 2, 2007, and will be followed by a second round in February-March 2007. Learn more about the program, opportunities for project support, and CGAP’s work on technology and microfinance at www.cgap.org/technology.”

by the MicroCapital Team -

MicroCapital Is Pleased To Present New Research On The Role Of Technology In Microfinance

The Microdevelopment Finance Team (MFT) carried out pilot projects in Uganda to determine the role technology could play in increasing the reach of microfinance. The team envisioned a "data transaction backbone" that would link microfinance clients to their financial institutions and beyond. The resultant technology was known as the Remote Transaction System (RTS). The conclusions drawn from the study (and similar initiatives conducted in other parts of the world) include: that business process change and the implementation of new technology should proceed in tandem; that creative technology solutions are required to be tailored to the unique and often challenging needs in emerging markets and local contexts; and that partnerships between MFIs and local companies assist in reducing infrastructure costs. Technologies such as the RTS can evolve and provide functionality that serves to build bridges between MFIs and the formal financial sector.

Download the paper here.

by the MicroCapital Team -

Great Expectations: How Will Technology Shape Microfinance Investing

According to Elizabeth Littlefield, CEO of the World Bank’s microfinance unit (CGAP), “while microfinance is becoming mainstream finance in over 130 countries, the vast majority of the world’s poor populations have not been reached.” The reality is a simple one: currently there is a global market of up to three billion working-age adults, yet more than two-thirds do not have access to financial services. What, then, stands in the way between Microfinance institutions (MFIs) and massive market expansion? The problem is multi-faceted:

  1. “micro” means many tiny transactions, so finding cost-savings innovations is fundamentally important
  1. especially in rural areas, low-income individuals lack access to basic transportation and communications to obtain financial services

Banking on Technology

The microfinance industry may well be reaching a turning point in its development with the advent of technologies that lower transaction costs and connect with rural populations.

1. Management Information Systems (MIS): the jury is sill out on the information technologies used by MFIs. Quality platforms that can be scaled (as used by retail banks) are too costly for all but the top micro-lenders.

2. ATMs: ATM transactions, which free up staff time and increase customer convenience, are as much as four times less expensive than those of a bank teller.

3. Plastic Cards: A major advance in convenience, access, efficiency, and cost-savings is the stored value card and debit cards. This plastic strategy, which transitions clients to electronic banking transaction channels, has drastically changed the commercial banking model.

4. Personal Digital Assistants, or PDAs, are commonly being used by larger, well-integrated MFIs to assist loan officers in the field to update client information and fill out electronic loan applications.

5. Cell-phones: Cell-phones can be utilized for 1) telephone banking (calls made to a call center); 2) mobile banking (phone used to execute transactions directly); 3) stored value devices. There are over one billion mobile phones worldwide, and the mobile phone revolution is reaching even the most rural areas through initiatives such as the The Grameen Village Phone Program, which provides mobile telecommunications services by micro-franchising cell-phone rentals in rural villages, now in Africa too.

The question that seems to hang over all this technology, however, is well articulated once again by Ms. Littlefield: “Do we think [the poor] might pay back money into a machine as faithfully as they have paid back their loan officer at weekly meetings?” Strong and constant contact between loan officers and clients constitutes the critical success factor to date in microfinance, so technology would most likely enhance, not replace, this relationship, at least for the time being.

by the MicroCapital Team -

Bay Area January 9th Presentation on Microfinance and Technology

Thanks to Dave McClure of 500 Hats for the following posting:

The next Silicon Valley Microfinance Network meeting will be held on Monday January 9th at the eBay / PayPal Conference Center in San Jose, and our speaker will be Janine Firpo.

Janine will be presenting her perspective on the appropriate role of technology in the field of microfinance, as well as her experiences building a Remote Transaction System with HP in Uganda.

To register for the event, please click here or visit the SVMN website for additional details.

by Rohan Kumar Agarwal -

MICROCAPITAL BRIEF: Lipa Later Acquires Fellow E-commerce, DFS, Merchant Services Platform Sky.Garden of Kenya for $1.6m

Lipa Later, a Kenyan financial technology (fintech) firm integrating e-commerce, digital financial services and merchant services in four African countries, recently paid KES 250 million (USD 1.6 million) to acquire Sky.Garden, a Kenyan service that was launched in 2017 but had announced it would close during 2023.

by Hawra Moochhala -

MICROCAPITAL BRIEF: Global Partnerships, Goodwell, Oikocredit Invest $8.5m in Equity in Good Nature Agro to Boost Profits of Small Farms in Southern Africa

Zambia-based Good Nature Agro recently raised USD 8.5 million in Series B equity from US-based Global Partnerships and two organizations with offices in the Netherlands, Oikocredit International and Goodwell Ventures. Good Nature Agro supports small-scale farmers with: (1) seed selection; (2) financing; (3) access to technology;

by Hawra Moochhala -

MICROCAPITAL BRIEF: RDG Collective Borrows $2m from Oikocredit for Pay-as-you-go Solar Appliances for 12k Low-income Households in Zambia

Dutch impact investor Oikocredit recently channeled USD 2 million to RDG Collective, a provider of renewable energy products to households in Zambia. Through this collaboration, RDG plans to supply 12,000 households with “access to clean energy

by Hawra Moochhala -

MICROCAPITAL BRIEF: Whole Planet Foundation Offering Interest-free Wholesale Funding for Microfinance in Latin America, Caribbean

As a part of its goal to reach 300,000 “microentrepreneurs, smallholder farmers, and [members of] vulnerable populations,” the US-based Whole Planet Foundation is accepting applications for loans and grants from “socially-focused microfinance institutions, social enterprises, nonprofit organizations and cooperatives” that provide microloans and related services.

by the MicroCapital Team -

SPECIAL REPORT: Digitizing Microfinance to Meet Customer Needs via an Incremental Approach #EMW2023

e-MFP logoAt today’s European Microfinance Week panel on transforming microfinance institutions (MFIs) into digital financial services providers, the focus was on meeting customer needs – not just implementing digital products, but attaining measurable success for clients and MFIs. Given that 80 percent of many microfinance portfolios comprises renewals, the renewal of microloans is a great process to digitize. This can free up staff to focus on recruiting new clients.

The consensus of the panelists was that going digital cannot be addressed primarily as a technology problem; rather it must be looked at as a business problem. The Vitas Group of Middle Eastern MFIs made the conscious choice to build a parallel system rather than

by Pranav Agarwal -

MICROCAPITAL BRIEF: Baobab+, TradeLenda Partner on Solar Energy Solutions for SMEs in Nigeria

Baobab+, a French energy and technology company active in six African countries, recently partnered with TradeLenda, a Nigerian financial services company serving small and medium-sized enterprises (SMEs), to expand lending to SMEs to buy solar generators, freezers and refrigerators. SMEs will be able to

by Hawra Moochhala -

MICROCAPITAL BRIEF: Banco de Credito del Peru (BCP) Launches iO Banking App with Support from i2C 

With the goal of encouraging digital banking and boosting financial inclusion, Banco de Credito del Peru (BCP) recently collaborated with US-based payment software company i2C Incorporated to launch the iO app, which is available on the App Store and Google Play. The app’s offerings include: (1) conventional and virtual credit cards branded by US-based Visa Incorporated;