Computerizing Village Banks: Pro-Poor Information Technology for Community Based Rural Microfinance Institutions

In this paper, the authors state that their mission is "to make service easier faster and better" for village banks operating in remote rural areas. The authors:

• Wish to help people in remote rural areas access the benefits of Information Technology (IT) as well as address the challenges that arise out of poor book-keeping in most village banks.
• State that the objective of this paper is to share their experiences with the hope that it will contribute to achieving the objectives of the Microfinance Outreach Plan, which stresses the need for good MIS (management information systems) as a means to increase rural finance outreach.

The paper:

• Discusses that IT can enhance the speed, transparency, quality and effectiveness of the services of village banks. The time saved and reallocated can translate into a larger client base, larger savings and a higher quality loan portfolio;
• Draws critical lessons that other software developers, vendors, installers, implementers, donors and end-users might find useful in making optimal decisions on computerization interventions;
• Reviews the various aspects of the computerization process;
• Documents the authors' field experience involving 19 institutions, plus discussions with various stakeholders.

The authors conclude with the argument that

• Computerization yields immediate returns because it increases staff productivity.
• Thus, the investment in computerization will have a very high return on investment, because it will help to expand outreach to millions of rural dwellers.