Virtual Conference Day 2: Getting Past the Same Old Conversation

Today’s conversation is moderated by Xavier Faz and Lauren Braniff of CGAP.

Do we need a paradigm shift in the information systems conversation?

As concerns grow in the microfinance community about delinquency crises, responsible finance, client over indebtedness, and social performance management, it becomes increasingly important for MFIs to have solid systems in place to manage their business and understand clients.

The series of workshops held over the past year by CGAP and Grameen Foundation revealed two especially important points:

1. Participants were anxious to talk about a topic which has been eclipsed in recent years by other exciting technology developments such as branchless banking. The workshops revealed that this topic is still front and center at many MFIs, both large and small.
2. The conversation does not seem to have progressed beyond where it was 15 years ago. That is to say, MFIs still require support in the area of capacity building, vendors still need to better understand the business of MFIs, and many funders, associations, and other support networks for microfinance are not sure where they are best placed to help.

How do we advance this conversation to bring about better use of technology at MFIs? What new ideas would help catapult MFIs past this stalemate?

Here a few ideas discussed at the workshops (view the complete list):

1. Explore new business models. Commission research to clearly define Software as a Service (SaaS) opportunity for MFIs, identify possible providers, and undertake case studies to understand how/if this is a viable model for microfinance.
2. Define standards to bring together the fragmented microfinance market. Standards would help software vendors develop products which work for a variety of MFIs. 
3. Donors and investors could condition funding and allocate a greater proportion of technical assistance to getting MFI systems in order. Growing appetite to invest in tier 2 or 3 MFIs may yield better results if efforts are placed in helping these MFIs improve their core systems.

Would these actions bring about significant change which would help MFIs make better use of technology? What other suggestions do you have?