Low cost technology solutions for increasing outreach

  • Camilla NESTOR, MIX
  • Abdukodir SATTOROV, Agora Microfinance Zambia 
  • Mamadou LAMINE GUEYE, Caurie-Microfinance Senegal
  • Alexis LEBEL, OpenCBS


Camilla NESTOR, from MIX, introduced the panellists and then set the theme of the discussion. Nestor explained how technology, when combined with clear business goals, can be very useful to
develop and implement tools in an affordable way.

Alexis LEBEL of OpenCBS, provided a software provider's perspective, placing convenience, ease of use and affordability at the centre. Open source software is a strategy to attain all these three elements. Lebel observed that the majority of MFIs have not computerised its information system for microfinance operations. OpenCBS has currently 180 users, of which 160 use the free open source solution. Lebel believes that technology can reduce transaction costs whilst increasing outreach, helping MFIs achieve their social goals. Lebel shared the vast advantages of developing open source software: it provides open Application Programming Interfaces (APIs) enabling different databases to share data, thus facilitating reporting activities enabling MFIs to report quickly and clearly on compliance; and it is affordable because development costs can be shared with several users. Finally, the users are never hostage of the solution since they can leave the provider any time and keep the source code for their own use.

Jeroen HARTEVELD shared that digitalisation is a core pillar of FMO's strategy. In doing so, Harteveld expressed the importance of correctly digitalising. Organisations need to select and use resources wisely, incorporate the correct hardware, interact and partner up. To facilitate this, FMO has launched a platform called
FinForward for FinTech companies.

Abdukodir SATTOROV shared Agora Microfinance Zambia's digitalisation strategy that uses OpenCBS. Phase one of Agora's strategy focuses on loan assessment handled by tablets in the field. This has reduced turnaround time, increased outreach and customer satisfaction and reduced printing and stationary cost. The result is that loan officers can now handle 703 clients, whilst before digitalisation this was 470. For the future, Sattorov shared that a new low-cost device with a finger print scanner, a small receipt printer and a screen will be available to loan officers. The introduction of the device will digitalise the entire loan cycle including GPS mapping and the retail business operations of clients. Lastly a loan scoring system will also be developed.

Mamadou Lamine GUEYE, from Caurie-Microfinance Senegal, shared a strategic plan for village banking, as 60% of Caurie-Microfinance's clientele is rural. They too face high operational costs and significant risks of their loan officers, which impacts the institution's profitability and places a strain on clients. Gueye's full strategic plan is to transform the organisation to be completely digital: offering digital services for agency banking, digitalising field operations, and implementing bank to wallet and SMS banking by the end of 2019. This is possible due to the strong network coverage in the country. Gueye explained that the institution is tackling its challenges by fostering technical and financial partnerships with multiple stakeholders: investors, mobile service providers, mobile operators and banks.

Nestor asked Harteveld to explain the role of MFIs in the digital future within FMO's investment portfolio. Harteveld explained that access to finance is the focus. Whilst FinTech is part of the solution, MFIs have to understand the policies and contextual issues such as client protection. For this reason, these institutions are highly needed in order to build and keep trust.

Nestor then asked Sattorov if the biggest challenge is getting people to use the software, and not the technology itself. Sattorov expressed that change is tough for MFIs and that is why the digitalisation is separated into phases and over a long period. Lebel added that this is what makes open source software for MFIs necessary. Additionally, he stated that the software needs to remain agile to the clients' needs and user experiences that change over time.


A member of the audience asked if open source software is easy to hack since its code is publicly known. Lebel explained that whilst the software is open source, it still must be hosted. Security is handled by the host, meaning that access to data is protected. Another member of the audience asked about how long it would take to implement full functionality using the open source software. Lebel answered that in general, for full functionality, the software would need to be tested and customised to meet specific client and market needs. This can take anywhere between a few months to a year.

Another participant from the audience asked how the panellists felt about being pioneers, and how their experiences will lead to potential failures being avoided. Sattorov stated that they are not the first in Zambia to go digital. Harteveld explained they are able to take a risk on some FinTech failures because the fund is large enough, and opportunities are many. He added that it's very important for them to look at the impact the technology has on clients.

A member of the audience then asked how one can ensure that digital growth does not lead to negligence or mistakes. Sattorov responded, stating the importance of remaining close to the staff and incorporating checks and reminders to ensure quality and care elements. Lebel added that this is the major advantage of technology: operations are automated, monitoring and evaluation is carried out punctually, and systems work in a smooth manner. Sattorov built on this stating that the interface also makes it easier for loan officers and clients to use because all the time-consuming calculation is handled automatically.

The final question was related to the costing aspect. If the purpose of the MFI is to reduce the costs, how come the MFI charges customers for transactions made through the system? Sattorov explained that whilst there is a small charge, it is relatively much cheaper than the fee for transportation costs; in general, the client will be saving money.