Technology Overview

Technology can reduce transaction costs and improve transparency in delivering financial services, both of which can translate into increased access and lower costs for many lower-income clients. Streamlined and automated processes allow financial institutions to extend services to harder-to-reach and more costly clientele by replacing people and branches with point-of-sale (POS) devices and branchless banking strategies. Technology undergirds the management information and reporting systems that are essential for efficient financial service delivery.

Despite the appeal of advanced delivery technologies, relatively few financial institutions have successfully deployed them to reach poor and low-income clients. Developing a solid management information system still remains one of the most important tasks facing microfinance institutions, particularly those scaling up. Challenges include the high cost and limited availability of existing technological solutions, lack of widely available local technical support to support MIS software, consumer adoption rates of technology, lack of basic communications infrastructure in many countries, and inadequate policy environments.