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Editorial

Book devoted to technology’s impact on microfinance

October 31, 2014 02:37 PM

By Dr Jaskiran Kaur
LUDHIANA: “Advantages Technology for Microfinance – Solution and Challenges”, compiled and edited by Professor Arvind Ashta, is a book which systematically attempts to address technology’s impact on microfinance dexterously compiled and edited by Professor Arvind Ashta, it covers a wide range of technology applications that will define microfinance of next generation, says Dr Jaskiran Kaur, Assistant Professor at the GNIMT, Gujarkhan Campus in Ludhiana.
Dr Jaskiran Kaur in her review of the book says that it has covered advantages and disadvantages of technology-enabled microfinance and answered that what will be inclusiveness and empowerment of service among others. It may be years, even a decade before we really understand the power of technology and its limits. Indeed, still many grapple with the true impact that access to credit – Prof. Yunus’s early insights – has for the poor. But as an early proponent of efforts to track, advance and pioneer technology for microfinance. The exact impact of technologies depends on a myriad factors by researchers external to an enterprise without exact information on costs. Perhaps technology will lead to new forms of disruptive or radical innovation permitting peer to peer interaction and new forms of crowd sourcing and recombinant innovations as businesses network and offer new kinds of business processes made possible by this new technology.
Dr Jaskiran Kaur says the first three sections of the book in different chapters have smartly addressed
these issues. Section 1 introduced by Raghavan Kunigahalli, contains six chapters by different authors, dealing with information technologies or management information systems and answered how they are contributing to microfinance.These technologies include improved MIS, more specific MIS adapted to microfinance, and sharing the MIS with other MFIs in the Software as a Service concept.
Section 2 introduced by Kevin Day, contains four chapters dealing with mobile phones and how they are contributing to increasing the outreach of microfinance. These chapters concern countries which have already implemented some form of mobile banking as well as countries where it is being tested and those which are thinking about
Section 3 introduced by Arvind Astha, dealing with online financing solutions and how they may permit microfinance to reach out to more investors and retail investors. A marketing analysis of the existing online microfinance players is followed by trying to understand if the web 2.0 tools do indeed lower costs. A case study of a more general website looks at how to bring institutional investors into contact with NGOs and for-profit entities with social objectives, including those in microfinance. Gloria Estape-
Dubreuil introduces the last five chapters constituting
Dr Jaskiran Kaur states that Section 4 deals with questions which do not fit into this perspective but are also related to technology and microfinance. Two of these papers are on techniques for risk management, two on adapting the microfinance perspective to developed countries, and the last paper is on using microfinance to finance appropriate technologies. It is important, at the end,
to remember that we are all working to harness technology for a reason, and that is to improve the lives of the millions of poor people, whether they are in developed and poor countries.
This book brings out the fact that while the deployment of technology based solutions certainly offers cost reduction, it also offers better transparency, auditability, timeliness of data and enrichment of the ngagement model with clients, all of which have the potential for long term impacts. On the one hand,
all of these improve the image of the sector and reduce the ethical risks inherent in working with people from different cultures. On the other hand, they increase outreach not only to more poor borrowers, but outreach to the investors who are financing the microfinance sector, be they donors, lenders or investors.
All of these people, on the two ends of the microfinance supply chain as well as the stakeholders within the supply chain, in fact practically the whole world, is watching closely the deontology as well as the teleology of the microfinance movement. We are wondering whether the movement contributes to reducing poverty and whether it can do so through free, democratic, market-based solutions. This book is on how technology can add to both these solutions.

Asst Prof, GNIMT, Gujarkhan Campus (Ludhiana)

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