Rob Katz

Will Open Source MFI Software Set the Industry Standard?

David at Microcapital reminds us of the Remote Transaction System, developed by Hewlett-Packard in conjunction with partner MFIs to widen the reach of financial services into rural areas. WRI was closely associated with the RTS project, at one time holding the intellectual capital in trust and later writing a full-length case study on the project’s results and potential.

David, meanwhile, wonders whether the open-source solution–now being shepherded by Sevak Solutions–will set an industry standard for microfinance software. Excerpts:

The RTS innovation will hopefully…allow for the creation of an industry standard and also achieve a breakthrough in the scale of microfinance services, because only open source might be affordable for all those tiny, cash-strapped microfinance institutions out there. Will this open source development create an industry standard? A standard is certainly needed. Banking software taken downstream to service microfinance is just too expensive to buy and maintain for most micro-lenders, while on the other hand, the new products from technology firms focused on microfinance are limited in the face of microfinance market challenges, namely varying language, regulation, maintenance (infrastructure is scarce) and of course, cost.

HP is now out of the picture–they shut down all BOP projects when Carly Fiorina got the axe–but at least this work continues at Uganda-based Sevak. I?m encouraged that local communities are finding local solutions, but it’s also good to know that former HP managers are still involved in the project.