IBM Partners with Grameen Foundation to Expand Its Open Source Microfinance Banking Platform And Hel
Monday, October 15, 2007
IBM (NYSE: IBM) and Grameen Foundation today announced a collaborative project to help microfinance institutions (MFIs) better serve poor communities around the world by expanding Mifos, Grameen Foundation’s ground-breaking open source microfinance software platform. The project will build additional functionality and robustness into the Mifos application and give MFIs around the world access to new, world-class software that streamlines the lending process and significantly reduces operational and technology costs. Five MFIs are currently deploying Mifos in India, Kenya, Tunisia, and Honduras. ARMONK, NY, and WASHINGTON, D.C. – October 15, 2007 – IBM (NYSE: IBM) and Grameen Foundation today announced a collaborative project to help microfinance institutions (MFIs) better serve poor communities around the world by expanding Mifos, Grameen Foundation’s ground-breaking open source microfinance software platform. The project will build additional functionality and robustness into the Mifos application and give MFIs around the world access to new, world-class software that streamlines the lending process and significantly reduces operational and technology costs. Five MFIs are currently deploying Mifos in India, Kenya, Tunisia, and Honduras.
MFIs help poor people pull themselves out of poverty by providing small loans (usually less than US$200) to establish or expand very small, self-supporting businesses. Many also provide other financial services such as savings accounts, micro-insurance, and social services such as education and healthcare.
Today, MFIs are inhibited from extending their reach because they lack a flexible, cost-effective technology infrastructure that enables them to expand their operations to provide loans to more people and to develop new products and services. Many MFIs are still using pen and paper or simple spreadsheets to process loans. A 2004 study by the Consultative Group to Assist the Poor (CGAP) showed that just half of all MFIs around the world have automated information systems, and those that do invest in technology spend duplicative resources on custom-built systems that are extremely costly and difficult to maintain.
The work that IBM and Grameen Foundation are collaborating on will help address these issues and drive the industry to work collaboratively to build and maintain a strong and stable software platform that MFIs can use to automate portfolio processing and build next generation microfinance applications. The benefits of the new Mifos platform will include (1) access to world-class software for all microfinance institutions; (2) global standards in management and reporting; and (3) sharing and scaling of technology innovation. All of these benefits will contribute to the microfinance industry?s capacity to increase its outreach to those in need.
“We are pleased to collaborate with IBM in further developing Mifos as a robust, best-in-class software platform that unlocks the potential of microfinance institutions to enhance their operations and provide more products and services to the world’s poorest people,” said George Conard, Director of the Mifos Initiative at Grameen Foundation. The Mifos initiative is being spearheaded by the Grameen Technology Center, the Seattle-based division of Grameen Foundation that focuses on using technology solutions in the fight against global poverty.
“Microfinance was one of the most active topics at the 2006 IBM Innovation Jam due to the pressing need to help poor people around the world,” said Bridget Van Kralingen, General Manager, IBM Global Business Services Northeast Europe. “IBM’s deep expertise in both financial systems and open source software will accelerate the development of Mifos, and will enable us to make a strong contribution to an innovation that matters for the world.”
Continue reading “IBM Partners with Grameen Foundation to Expand Its Open Source Microfinance Banking Platform And Help Eradicate Poverty“
