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Supporting the creation of small businesses in the developing world
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Currently 30 - 50 million people access and use microfinance programs. Yet, by removing barriers such as poor infrastructure, limited access to funding, and operational inefficiencies, as many as 500 million people could enrich their lives and communities through access to microfinance programs, according to the World Bank. With the development of a remote transaction system (RTS), the Uganda microfinance pilot program aims to help overcome these barriers.
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The targeted populations for outreach include women and men in rural and peri-urban areas throughout Uganda. For the project to succeed, the RTS solution will need to demonstrate improved operational efficiencies with secure data integrity. The pilot solution must be able to adapt to both group and individual borrowing and payment preferences.
The immediate impact of the remote transaction system will be:
- borrowers will have increased access to funds
- borrowers will save travel and transaction time. (Such savings can increase return on a small loan by as much as 20-30 percent, helping the borrower to feed his or her family and send children to school.)
- Leading microfinance institutions (MFIs) will grow in scale and ability to sustain lending operations.
- More micro-entrepreneurs can be reached and have financial services delivered to them.
- Success will provide a first step toward the creation of a reputable credit bureau.
For more details about how borrowers, microfinance institutions, credit bureaus, and aid agencies can benefit from participation in the microfinance pilot program, read the solution brief (PDF, 552 KB).
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| The Remote Transaction System is a 'technology-enabled' distribution channel that leverages existing third-party infrastructure (MFI backoffice servers and databases) to conduct rural cash transactions. |
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Using the RTS device and the borrower's smart card, a field agent can capture loan payment and savings data electronically, storing and transmitting information that is currently tracked manually. The RTS will also make it easier to create an electronic identification system for use by microfinance institutions and credit bureaus.
For more information on how the remote transaction system works, see also Mainstreaming microfinance (PDF 704 KB).
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To learn more about the microfinance pilot in Uganda and the organizations supporting this project, please contact us:
Janine Firpo
Initiative Director
janine.firpo@hp.com
Kip Darcy
Pilot Director
kip.darcy@hp.com
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