Taking E-Finance to the Micro Level

This paper describes the successful utilization of technology to aid the provision of microfinance in Africa. The author highlights:

• Microfinance has evolved as an effective tool to provide credit on a sustainable basis to the informal sector, but at a very low level of outreach;
• The spread of telecommunications access is one of the most positive changes in the development scene;
• Digital technologies have fueled the global economy and have opened the possibilities for including the poor in the global economy on an unprecedented scale.

The author opines that it is time to mainstream microfinance into the formal financial market place. This can be done through:

• A better range of services;
• Increased access to capital;
• Sound operating systems run by competent managers;
• An appropriate regulatory environment coupled with prudential supervision.

The author states the example of PRIDE Africa, a US non-profit company, which has linked its 110,000 clients to financial services, information, and markets through a virtual network of small enterprises and suppliers. As per the author, this could be achieved because PRIDE Africa:

• Ensured that hardware functions appropriately and accommodates the capacity required;
• Developed software solutions to conduct operations better;
• Used e-commerce and internet to conduct transactions;
• Incorporated magnetic stripe transaction cards to speed service delivery.