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    Microfinance Technologies

    Duration: 2008-2012

    Contact person: Dr. Bernhard Nett – Muhammad Adeel M.Sc.

    In 2008, our Research Group “Information Systems and New Media” (WiNeMe) of the Siegen university has started research in the field Information and Communication Technology for Development (ICT4D), in particular, the design of Microfinance Technologies. One year later, our students conducted two ethnographic studies on the Grameen Bank, Bangladesh, and the Khushhali Bank, Pakistan. The case studies showed that existing ICT solutions for microfinance are either excluding the existing field level of operation or are out of reach of many microfinance institutions (MFIs). As a consequence, we have studied opportunities for (mobile) ICT tools and for knowledge exchange within the MFI, between the MFI and its clients, and among the clients.

    MFIs operate in environments which differ considerably from other, more established forms of banking in terms of infrastructures, markets, products, technologies and last, but not least, customers. Structural problems may hinder the poor to make productive use of credits: poor (financial) literacy, lacking resources to overcome illnesses and injuries of family members, limited access to markets and market information, cultural differences between credit-taker and the bureaucratic MFI, and many more. Finding socio-technical solutions for such problems could improve the performance of many MFIs. Therefore, we speak of “Microfinance Technology” in a broad sense including, for instance, educational and community software, if they become part of the ICT infrastructure of an MFI.

    Finding better, faster, and more efficient means to reach existing and underserved markets is a growing priority for MFIs, too, which may include training and capacity-building activities for the field staff, but for the clients, too. Innovation in microfinance has to improve service delivery down to the clients, and to promote technological skills and organizational development including the field level. In order to keep pace with the changing needs of clients, MFIs must ongoingly evaluate and improve their products, organization and technology. By providing underserved markets access to financial services, microfinance has to be an innovation itself.

    Regarding the MFI side, there are some fundamental problems like high risk, high operational costs, lack of funds, difficulty in measuring social and financial performance, lack of customize solution for customers, poor distribution infrastructure etc. These problems need actions, and technology may play a role here. Especially, mobile technology has proved itself as a successful tool in reducing the effects of above-mentioned problems. We believe that productivity must not necessarily only mean reducing operational costs: it may also mean increasing the service output at the field level. On the client side, customer loyalty largely depends upon non-financial products that respond to life-events such as healthcare emergencies and reduce structural weaknesses such as illiteracy, information isolation, and poor infrastructures.

    To support MFIs to establish appropriate services for the poor clients is our particular focus, to enable a synergic combination of sustainability and poverty reduction our general one. We want to take into account the “last mile”, consisting of field officers and (potential) clients: it could help them if they could share knowledge within their groups, but also: among them. Therefore, Microfinance Technologies are more than automation. Our R&D of Microfinance Technologies tries to support technological and organizational learning in MFIs.

    Publications

    2013

    • Adeel, M., Nett, B. & Wulf, V. (2013)Microfinance in the South : from money processing to community building

      IN International journal of services technology and management (IJSTM), Vol. 19, Pages: 81–98
      [BibTeX] 

      @article{adeel_microfinance_2013,
title = {Microfinance in the {South} : from money processing to community building},
volume = {19},
number = {1/2/3},
journal = {International journal of services technology and management (IJSTM)},
author = {Adeel, Muhammad and Nett, Bernhard and Wulf, Volker},
year = {2013},
keywords = {Microfinance},
pages = {81--98},
}

    • Adeel, M., Nett, B., Gurbanova, T., Wulf, V. & Randall, D. (2013)The challenges of microfinance innova- tion : Understanding ‘ private services ‘

      , Pages: 21–25
      [BibTeX] 

      @article{adeel_challenges_2013,
title = {The challenges of microfinance innova- tion : {Understanding} ‘ private services '},
number = {September},
author = {Adeel, Muhammad and Nett, Bernhard and Gurbanova, Turkan and Wulf, Volker and Randall, David},
year = {2013},
keywords = {Microfinance},
pages = {21--25},
}

    2010

    • Plogmann, S., Adeel, M., Nett, B. & Wulf, V. (2010)The Role of Social Capital and Cooperation Infrastructures within Microfinance

      IN Proceedings of the 9th International Conference on Designing Cooperative Systems, Pages: 223–244
      [BibTeX] [Abstract]

      Direct deliberative democracy presents a conceptually attractive model of civic governance – particularly relevant at local scale. We outline the ‘work’ of direct deliberative democracy by considering its underlying principles and objectives, and discuss four fundamental challenges that are commonly proposed: the difficulty of coordinating direct participation, the expertise required of participants, the often underestimated dynamics of power in direct action, and that deliberation is not necessarily the sole, ideal mode of participation. At hand of a case study of an online ‘community of interest’, the paper investigates the potential role of social media to facilitate this work, and to mitigate the challenges cited.

      @article{plogmann_role_2010,
title = {The {Role} of {Social} {Capital} and {Cooperation} {Infrastructures} within {Microfinance}},
abstract = {Direct deliberative democracy presents a conceptually attractive model of civic governance – particularly relevant at local scale. We outline the 'work' of direct deliberative democracy by considering its underlying principles and objectives, and discuss four fundamental challenges that are commonly proposed: the difficulty of coordinating direct participation, the expertise required of participants, the often underestimated dynamics of power in direct action, and that deliberation is not necessarily the sole, ideal mode of participation. At hand of a case study of an online 'community of interest', the paper investigates the potential role of social media to facilitate this work, and to mitigate the challenges cited.},
journal = {Proceedings of the 9th International Conference on Designing Cooperative Systems},
author = {Plogmann, Simon and Adeel, Muhammad and Nett, Bernhard and Wulf, Volker},
year = {2010},
keywords = {Microfinance},
pages = {223--244},
}

    • Adeel, M., Nett, B. & Wulf, V. (2010)Innovating the field level of microfinance

      Proceedings of the 4th ACM/IEEE International Conference on Information and Communication Technologies and Development – ICTD ’10. New York, New York, USA, Publisher: ACM Press, Pages: 1–10 doi:10.1145/2369220.2369221
      [BibTeX] [Download PDF] 

      @inproceedings{adeel_innovating_2010,
address = {New York, New York, USA},
series = {{ICTD} '10},
title = {Innovating the field level of microfinance},
isbn = {978-1-4503-0787-1},
url = {http://doi.acm.org/10.1145/2369220.2369221 http://dl.acm.org/citation.cfm?doid=2369220.2369221},
doi = {10.1145/2369220.2369221},
booktitle = {Proceedings of the 4th {ACM}/{IEEE} {International} {Conference} on {Information} and {Communication} {Technologies} and {Development} - {ICTD} '10},
publisher = {ACM Press},
author = {Adeel, Muhammad and Nett, Bernhard and Wulf, Volker},
year = {2010},
keywords = {CSCW, sustainability, participatory design, ethnography, Microfinance, CONTici, innovation, microfinance, microfinance technology, tailorablity, work practices},
pages = {1--10},
}