Paris Microfinance Network

Resources: Technology

PDAs

The Issue

The biggest challenge for many MFIs is how to increase loan officer productivity in reaching rural communities. In developing countries a substantial impact can be made by reaching out to potential clients in remote rural areas, many of these people are also 'unbanked', have never had a bank account or formal financial service offering, yet request these services. Technological, geographic & climatic challenges have limited the availability of microfinance services to about 70 million clients out of a potential market estimated at 500 million and an even larger 'unbanked' population of more than a billion worldwide.

Bringing services to these people can help them increase their personal productivity & advance societies. But doing so is costly for banking institutions, hence most formal institutions have not set up branches in far reaching rural areas nor POS (point of sale operations.) Transaction processing is a time-consuming and arduous process, since either clients must travel far to urban centers where the institution has an office, or MFI field staff must travel long distances to villages in order to find new customers, document payments, collect funds, etc. These transactions often take place in a variety of ways - village meetings, market day in local urban centers, at the institutions office, or at a local bank, etc..

Fortunately, many banks & MFIs have been looking at emerging technology solutions, such as smart card, Biometrics, ATMs and handheld devices, to assist them in reaching clients in remote areas & automate these processes. Of course in order to support the usage of a variety of data capture methods, IT systems need to capture transactions from several electronic and analog devices. To make this feasible & successful, a single transaction data format must be conformed to.

One technology solution, is the use of handheld devices (PDA's) which loan officers can use to process loan applications, payments & other services such as client data, by capturing data electronically & remotely and then uploading the information into their IT system. Several companies have created applications and conducted pilots to test how such PDA tools could acquire & retain customers, cut labor & material costs, save time & reduce data-input entry.

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Projects :

PortaCredit

In conjunction with Banco Solidario, Accion International launched a program whereby loan officers in Ecuador were equipped with personal digital assistants (PDAs) and PortaCredit, a customized software program that has improved efficiency and access across Banco Solidario's wide range of clients. PortaCredit combines financial analysis, loan processing, and risk analysis into an easy-to-use software application that can run on wireless devices such as PalmPilots. With a handheld and a wireless connection to the office, a loan officer visiting a rural client can upload the loan application and receive an approval only 10 minutes later. Banco Solidario is working to overcome high equipment and connectivity costs, but despite these barriers, the program is set to be successful because it is able to lower the banks's costs while expanding its markets to underserved clients.

Remote Transaction System (RTS)

In 2002, Hewlett Packard formed a partnership with a number of organizations (Accion, BizCredit, FINCA, Grameen Technology Center, Freedom from Hunger, Global echange, PRIDE AFRICA) & microfinance networks (MFIs) in Uganda working in related areas to explore how technology could be used effectively to help scale microfinance especially in rural areas. The partnership called the Microdevelopment Finance Team (MFT) was quite successful at mobilizing resources from the United States Agency for International Development(USAID), leading academic institutions, and engaging a large management consulting firm. What emerged from the effort was a combination of technology and business processes, the Remote Transaction System (RTS), that supports both group and individual lending, online and batch offline processing, and back office synchronization.

RTS is based on the use of hand-held devices that can communicate over GSM cellular networks. Combined with the use of smart cards given out to clients and microfinance agents, the system allows MFI agents to collect crucial financial data in the field and subsequently to transfer the data directly into the MFIs’ computerized financial management systems. The RTS eliminates the need to prepare, transport, and enter hand-written reports, reducing costs for rural operations. In addition, electronic collection of data raises client confidence in MFIs, as well as reducing fraud. Finally, the system, if used by the industry as a whole, might allow MFIs to take full advantage of latent synergies that exist among geographically and financially diverse institutions. Read the full case study.

SatelLife - Handheld PDA system for Rural Healthcare

SatelLife has been passionately experimenting with handheld device usage in Africa since 2001 striving to improve health communication & information sharing. They are dedicated to improving the lives and health of individual children, women, and men who, in the end, are treated by individual, hands-on healthcare providers. As health improves, so does the demand for education and economic growth. SatelLife has demonstrated that PDAs can reduce the cost and increase the effectiveness of disease detection and management. To prove the concept, the company, in coordination with the Acumen Fund and the Red Cross, distributed PDAs to to rural health care workers. From Ghana to Kenya to Malawi, PDAs changed the speed at which health data is collected, analyzed and used by doctors and health workers to fight disease. The project recorded a 10-fold increase in survey completion speed vs. the traditional paper model, resulting in up to $100K in cost reductions over five measles campaigns that utilized 30 PDAs to collect data faster and more accurately.

SATELLIFE has used handheld computers, close to 2,000 units distributed, to deliver virtual libraries of information resources that would otherwise be unavailable to health professionals in resource-poor countries. This content has been adapted to the handheld format to facilitate ease of reading and navigation. PDA usage has allowed SatelLife to drastically improve it's collection, dissemination & distribution of vital health information for those areas that need it most.

Read the entire case study & PDA findings.

SatelLife reported these user interface findings on PDA usage:

SATELLIFE has rigorously tested handheld computers in a variety of challenging environments, with these key findings regarding their basic utility:

Portable, durable, and very powerful for their size, handhelds can perform many of the same tasks as a desktop or laptop computer at a cost of USD 100 - 200.

Handhelds function well even in environments where electricity is only available through solar chargers, car batteries, or other alternative sources.

Novice users have quickly adopted the technology, requiring only 1.5 – 2 days of training to master basic functions.

Participants have reported high levels of comfort and satisfaction using handheld computers for both information access and data collection.

Competent network and database managers require minimal training to support the use of handheld computers for routine information dissemination and data collection and reporting.

Data and information can be shared rapidly across distances when handheld computers are used in conjunction with the existing telecommunications infrastructure, but the technology is also highly functional in remote locations.