CGAP Announces Its 9 Technology Picks

Feb 2007
United States, February, 12 2007 - CGAP, the World Bank associated microfinance agency, announced its nine technology partners. Quoting the CGAP press release, the chosen nine are as follows:

Project Ideas Selected from Concept Notes Received:

1. Colombia: Credibanco VISA provides credit and debit card transaction acquiring to banks in Colombia through 53,000 points of sale and a telecommunications network that connects in real time to 17 principal cities of the country and 385 municipalities.

CGAP is planning a project with Credibanco to test whether a third party provider can use its merchant network to provide financial services on behalf of banks. Credibanco also plans to extend its existing merchant network to reach 250 additional municipalities that are currently unserved by bank branches. Banking agents in these municipalities will offer a full set of financial services on behalf of VISA member banks using POS and card-based technologies.

2. Kenya: Equity Bank, a leading Kenyan bank established in 1984, delivers a range of financial services to over 1,000,000 low-income clients and accounts for about 12 per cent of all bank accounts in Kenya.

CGAP is planning a project with Equity to test how mobile phones and a network of merchants can deliver deposits, payments, transfers, and credit to 1.77 million mostly rural Kenyans. Equity will also explore the possibility of extending loans via the mobile channel with clients having minimal touch with Equity’s loan officers.

3. Mexico: Te Creemos is a regulated microfinance institution whose main aim is to serve low income populations in urban and suburban regions of Mexico. Through a partnership with Farmacias del Ahorro, Te Creemos branches use the existing infrastructure of the pharmacy’s 600 outlets to conduct financial  transactions. Te Creemos has also begun to use biometric point-of-sale devices at retail outlets to extend its network beyond the reach of the pharmacy chain.

CGAP is planning a project with Te Creemos to test two different agent-based models – a mini-branch in a pharmacy chain, and an independent retailer that serves as a banking agent. CGAP will test customer response to financial services delivered with POS and card-based technologies.

4. Mongolia: XacBank is a microfinance bank with more than 60 branches and units throughout the country, and over 80 franchise Savings and Credit Cooperatives. The Bank has over 50,000 active borrowers and offers fourteen loan products and seven savings products, money transfers, payment settlement and leasing services.

CGAP is planning a project with Xac Bank to test the delivery of financial services to extremely remote populations using mobile phones and a network of cash-handling units at post offices and gas stations.

5. Pakistan: Tameer Bank is a microfinance bank aimed at serving the economically active poor in Pakistan with a range of financial services, ranging from savings and credit to home improvement loans and term deposits. In less than two years of operations, Tameer has established nearly 25,000 clients and 17 branches.

CGAP is planning a project with Tameer to test the delivery of financial services to poor clients using mobile banking and an agent network in urban slum and rural markets.

6. Philippines: Globe Telecom and the Microenterprise Access to Banking

Services (MABS) program offer mobile banking to clients in the Philippines.

Globe, a mobile operator in the Philippines, provides mobile banking services to over 500,000 clients. This service, called G-Cash, transforms mobile phones into ‘mobile wallets” allowing subscribers to send and receive domestic and international remittances through SMS, make purchases/payments at retail establishments, pay bills, and convert G-Cash to prepaid mobile credits. G-Cash was launched in October 2004.

MABS is a USAID-supported program that is under the Rural Bankers Association of the Philippines with Chemonics International as the main contractor. The MABS program helped the rural banks to begin using G-Cash for loan disbursements and deposits.

CGAP is planning a project with Globe and MABS to test customer adoption of mobile banking by 150,000 poor Filipinos in outlying provinces. The project will test how poor people respond to a “mobile wallet” product in lieu of a bank account, and will also test a hybrid model in which rural people can use a mobile phone to access an account in 11 rural banks for microfinance loans, deposits and remittances.

7. South Africa: WIZZIT is a virtual bank targeting the 16 million unbanked or

underbanked South Africans - about 60 percent of the country's population. Wizzit clients can use their mobile phone and a debit card to transfer funds to other bank accounts, purchase mobile airtime, pay bills, make purchases at retail establishments, and purchase pre-paid electricity, all from the convenience of their mobile phone. After less than two years of operations, Wizzit has over 50,000 clients.

CGAP is planning a project with WIZZIT to test customer adoption of its service by farm laborers and poor clients in rural areas and small towns. Wizzit will deliver financial services to these populations through mobile phones and POS devices at community phone kiosks and rural stores.

Project Ideas Selected from Concept Notes developed by CGAP

8. Kenya: Social Protection Payments Challenge Fund. CGAP will partner with the Financial Sector Deepening Trust to support experiments that test how technology can help deliver financial services in conjunction with social protection payments. These payments will be made by the Government of Kenya, with donor support, to families housing orphans and food-insecure Kenyans in the arid northern region of the country.

The Financial Sector Deepening (FSD) Trust is a donor-supported but independent entity established to support the development of financial markets in Kenya as a means to stimulate wealth creation and reduce poverty.

9. Maldives: Maldives Monetary Authority, the country’s central bank, has requested CGAP’s guidance to test if universal access to banking services and a dramatic reduction in cash usage are possible through an interoperable mobile banking system and a nationwide network of cash-handling agents. The project will benefit the 300,000 people living in the Maldives and mitigate the cash management challenges arising from the country’s landscape of 200 geographically dispersed islands.


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