Indian Microfinance Technology Resource Center

For many of the world's poor, microfinance works. But to reach the billions more who have yet to be reached by traditional microfinance, we must provide access on a much more ambitious scale. In several countries, technology approaches are emerging that have the potential to bring financial services to those that microfinance has found difficult to reach up to now. 's banks use 90,000 electronic terminals in retail outlets as a low-cost channel for hard-to-reach areas. Millions of people in the receive remittances and make purchases using their mobile phones. Banks in are sharing their technology platforms with microfinance institutions (MFIs) to expand their product range and reduce costs.

Agents: Reaching poor clients in rural areas is often prohibitively expensive for financial institutions. Banking agents can help them to increase their customer base and point of sale coverage without incurring the high upfront cost of building branches. Lower set up and operating costs should enable providers to reach further into rural and remote areas and serve poor clients with a full set of services in a sustainable way.
Information Systems: provide the technological foundation for financial institutions to engage in branchless banking, produce reports that meet the international standards for financial transparency, ensure donors follow good investment decisions and allow managers to generate timely, accurate performance data of their MFI's operations.

Mobile Banking: The explosive growth of mobile phones offers an opportunity to profitably bank large numbers of the unbanked. Fifty-nine percent of the more than two billion mobile users live in developing countries and many of them are among the unbanked. Conducting transactions with a mobile phone can be up to six times cheaper than processing the same transaction via teller window. Though cheaper, mobile phones alone are not sufficient - a cash handling network needs to be in place for accepting withdrawals and deposits.

Policy: Regulatory frameworks should balance the expansion of access with consumer protection and safeguards for the financial system. CGAP is analyzing regulatory issues that consider the use of technology approaches to expanding financial services to those without access in seven countries.