ON THE ROAD TRIP
The Technologies for Financial Inclusion Program aims to test and implement new uses of existing technologies to expand and improve financial services to microentrepreneurs and low-income population in Latin America and the Caribbean.
Two calls have been set in order to help identify and support ideas with the greatest potential to expand and improve financial services.
Impact and scope
The first call was launched in May 2010, and the projects’ approval stage has finished. The large number of ideas presented and parties who registered on the Program’s digital platform, as well as its maturity and competitiveness, indicate that success of the first call for proposals. The process was very competitive and consideration was given to the feasibility of the proposed ideas, and their potential impact on promoting financial inclusion, among other criteria.
Close to 800 users registered on the Technologies for Financial Inclusion Program’s platform, and 420 ideas were received from 31 countries, which were presented by a range of organizations linked to the microfinance market, technology providers, and telephone service providers. The presented ideas combined different technologies (e.g., mobile phones, point-of-sale terminals, and payment networks) and different business models to reduce operating costs, boost productivity, bring services closer to clients in remote areas, improve risk management and internal control, and increase coverage.
In July 2010, 19 ideas from 12 countries were preselected and six of them have been selected by the Program as eligible for financing projects.
Selected projects have some technical aspects in common. The use of mobile phones is a shared factor in nearly all of them, although there are three different variations in the specific use given to this technology:
(i) technologies to mobilize savings and extend services to the home, using mobile applications;
(ii) interaction with databases shared by credit advisors using mobile phones to facilitate their processes in the field; and
(iii) mobile banking and payments through clients’ cellphones.
Based on this first Call for ideas, the following lessons learned have been identified:
(i) technology is increasingly accessible, with online applications and greater flexibility for use in different contexts, linked to access through mobile devices;
(ii) the main areas for innovation detected in the first Call for proposals involve a combination of existing technologies and new business models;
(iii) it is still unclear how an investment in technology can translate into value for the organization and its clients;
(iv) mobile banking is emerging as a channel for expanding access to financial services among microenterprises and the poorest sectors; and
(v) considering the diversity of stakeholders, greater financial inclusion will not necessarily be driven by financial institutions alone.
The Technologies for Financial Inclusion Program does not presume to predict which models will be successful, but rather to promote experimentation and evaluation of different models for several contexts.
In general, each of the projects establishes a course to follow, which includes: the analysis of the technology and its use by the organization and its clients, as the first component; documentation of the lessons learned from an initial implementation experience, as the second component; and the estabilsment of success factors as a third component, as well as a standardized methodology to be applied for large-scale rollout or replication in other organizations or countries in the region.
On May 30th, 2011, the Inter-American Development Bank (IDB), Multilateral Investment Fund (MIF), CAF-development bank in Latin America- and the Global System for Mobile Communications (Association GSMA) launched the second Call for proposals for Technologies for Financial Inclusion Program.
The Program is interested in receiving ideas from private companies, technology service providers, NGOs, cooperatives, associations, financial organizations, banks, foundations or other entities.
Complete information about the program and its organizers, key dates, FAQs, and application forms are available at www.tec-in.org.
For further information please contact firstname.lastname@example.org.