Editorial: Redefining financial services
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CTA. 2003. Editorial: Redefining financial services. ICT Update Issue 13. CTA, Wageningen, The Netherlands
Permanent link to this item: http://hdl.handle.net/10568/57632
Since the mid-1970s microfinance has become serious business. According to recent estimates, about 10,000 microfinance institutions (MFIs) are now providing small loans to 23 million people.
Since the mid-1970s microfinance has become serious business. According to http://www.planetfinance.org recent estimates, about 10,000 microfinance institutions (MFIs) are now providing small loans to 23 million people. An additional 500 million people in developing countries could benefit from microcredit. ICTs offer unique opportunities for MFIs to reach these people, and in the process to redefine financial service delivery in ACP countries. They provide cheap and efficient solutions to the high costs of supplying microcredit to large numbers of people, and are enabling MFIs and banks to extend their outreach to rural clients. Moreover, new technologies such as automated teller machines (ATMs) and smart cards in rural areas allow for tailor-made financial services to individual clients, obviating the need for group-based banking and savings schemes. This issue of ICT Update looks at some of the most exciting current developments in this field. First, http://ictupdate.cta.int/index.php/article/articleview/222 Vince Groh reports on DrumNet, which is building a network of information access points, or ´info-kiosks´, that offer combined microfinance and market information services for agricultural producers in Kenya. http://ictupdate.cta.int/index.php/article/articleview/224 Lincoln Mali explains how a local bank in South Africa is extending its network of ATMs in remote rural areas. The initiative is bringing basic banking services within the reach of farmers, enabling them to establish their credit worthiness, resulting in improved access to credit for the country´s poorest citizens. http://ictupdate.cta.int/index.php/article/articleview/223 Laurie Gutierrez reports from Ecuador that loan officers from a local MFI are using hand-held computers equipped with software developed by ACCION International to speed up the processing of microloan applications. For farmers here, as elsewhere, time is money. In the Solomon Islands, the government has set up the Online Business Information Service (OBIS) through which entrepreneurs can access information on microfinance and business opportunities. http://ictupdate.cta.int/index.php/article/articleview/226 OBIS webmaster Moira Nowak describes how a single computer connected to the Internet is helping farmers throughout the islands to expand their businesses. http://ictupdate.cta.int/index.php/article/articleview/227 Graham Bendell, director of operations at the Smart Card Society of Southern Africa, offers this issue´s closing thoughts on microfinance and ICTs, and in particular the promise of smart cards for ACP countries. Taken together, these articles show that ICTs, in connecting local as well as international microfinance initiatives in both the public and private sectors, are redefining not only the financial services they offer, but also the nature of the microfinance business itself. In the course of this transformation, farmers in the remotest areas of developing countries could be among the most significant beneficiaries.