How the Program works
The Interamerican Development Bank (IDB), The Multilateral Investment Fund (FOMIN), and The Andean Development Corporation (CAF) are implementing the Technologies for Financial Inclusion Program to:
|Test and implement technologies that help extend the reach and improve the effectiveness of financial services for micro-enterprises and low-income households in Latin America and the Caribbean.|
The program calls for ideas from across Latin America and the Caribbean, inviting organizations to submit ideas online for how to best to use technology to promote greater access to finance among micro-and low-income households in Latin America and the Caribbean. The ideas to be pre-selected, will seek one or more of the following results:
- Reduce costs to clients of financial institutions
- Reduce operating costs and improve productivity of financial institutions
- Deliver services closer to where clients live or work
- Improve risk management and promote greater internal control
- Increase the geographic coverage or facilitate entry into new market segments
- Improve products or services or generate new ones better adapted to client needs
- Other results that the applicant considers important to better serve target markets
To contribute to these results, the Program invites organizations to submit ideas to design, develop, roll-out and expand use of technologies such as:
- Mobile payments or banking via mobile phone
- Management Information Systems (MIS) / core banking systems
- Global Positioning Systems (GPS)
- Technologies for receiving cash payments via ATMs or other means
- Point of Sale devices (POS) and card technology
- Application service provision (ASP), or platform technologies shared across a network of organizations using open standards based Web
- Analytical applications for data mining / business intelligence or scoring
- Payment platforms / network / switches
- Other technologies considered relevant to address key challenges in the sector
The chosen ideas will receive assistance to develop strategies and project proposals that can be financed through grants and / or credit. The program may also provide technical assistance resources for ideas that request such support that are more experimental in nature and are at a design or pilot testing phase in order to generate learning issues relevant to the region.
At the project implementation stage, once project proposals are developed for eligible ideas, program sponsors will select projects for funding, implementation and subsequent evaluation. Through the joint effort, the program seeks to build an accessible knowledge base on new approaches, best practices and lessons learned regarding the use of technology in access to financial services.
We invite the following types of organization to enter ideas:
- Providers of Financial Services of various types including for-profit, non-profit, regulated or unregulated credit unions, microfinance institutions, agricultural cooperatives that provide financial services, banks, insurance companies, and NGOs
- Networks, associations or federations of financial institutions
- Private or public credit bureaus and credit information service providers
- Providers of electronic payment platforms
- Providers of technological services
- Research centers / Universities
- Partnerships among the organizations listed above
To present an idea pre-selected organizations that are not themselves providers of financial services or a private credit bureau that can function as the "executing agency” of the project should be linked to one or more providers of financial services. The executing agency must:
- Be legally incorporated in a member country of the IDB, registered and approved to receive support and implement the activities foreseen under the proposed project
- Have a minimum of three years of operation, as demonstrated in articles of incorporation and in audited financial statements for the past 3 years.
- Demonstrate institutional and financial capacity to ensure the proper administration and control of resources through accounting systems and procedures.
- Contribute at least 30% of the total project amount, which may come from the organization’s own funds or be co-financed from other sources.
The program can provide grants, loans and/or technical assistance in amounts ranging from US$ 25,000 to US$50,000 for developing the project strategy, and up to US$300,000 for its implementation, according to the logic of the project, the envisioned cost-benefit relationship and approval by the funder. The organization or organizations that apply must contribute or show co-financing of at least 30% of project cost. If loan funding is required financing conditions will be established based on the financial viability of the applicant organization.
The program will select and provide resources to develop projects that meet the criteria in the following four areas:
- Financial and technical capacity of the applicant organization or consortium as demonstrated in past experience
- Degree of experience in implementing projects using technology and providing financial products and services in the region.
- Relevance of the technological solution for the challenge or opportunity that it proposes to address
- Innovative elements of the proposed idea
- Potential for scalability of the initiative or its potential for replication
- Potential to generate new learning for the institution and the region
- The number of low income households and microenterprises to be served
- Potential reduction of costs of financial services and products
- Improvements in the efficiency of financial institutions
- Financial Inclusion of historically marginalized populations
- Likely cost-benefit relationship of the project idea
- Operational and financial sustainability of the proposed technology solution taking into account the financial soundness of the institution
- Proposed cost sharing or co-financing of the project
Call for proposals
The call for ideas will be open from June 4th to July 4th, 2012 (midnight Washington DC time).
From July 5th to August 5th, 2012, the Program’s evaluation committee will select the project ideas that best meet the criteria. Ideas that are pre-selected will receive support to develop the necessary documentation for the proposed project.
Announcement of selected projects:
In the last quarter of 2012 the Program will announce projects to be funded.