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Library » Point of Sale for Microfinance: A CGAP Presentation

Point of Sale for Microfinance: A CGAP Presentation
2004, CGAP
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Are Point of Sale Networks necessary?

This presentation discusses the necessity and advantages of Point of Sale (POS) Networks in microfinance. It defines POS as a system or a device that performs an electronic transfer from one account to another.

It states its case for POS as follows:

Changes in technology and industry dynamics make it possible for merchants to offer ATM services and non-cash purchases through POS;
The organic growth of financial institutions serving the poor is not filling the gap in service for the unbanked and rural areas;
Growth can take place by improving asset quality, customer service and operating efficiency;
POS have the following advantages for microfinance institutions (MFIs), clients and merchants:
- Increase the security of financial transactions;
- Reduce transaction costs;
- Improve outreach;
- Better staff focus on customer acquisition and service;
- Reduce risk of handling cash for clients and merchants.

The presentation concludes by listing the following preconditions necessary for POS networks to develop:

Satisfying customers and encouraging adoption;
Refocusing MFI business on core competence;
Optimizing pricing to encourage usage and expansion;
Identifying POS profitability drivers;
Dealing with regulation issues;
Managing the demand for cash;
Addressing business case issues for POS in microfinance;
Identifying key challenges for MFIs and banks rolling out POS;
Sharing pioneer approaches to solve challenges.

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11 May 2011
Point of sales


Tanzania

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Publisher(s):
CGAP