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Technology Penetration: Microfinance sector in India is growing very rapidly but facing many challenges. According to Microfinance Technology conference report, Microfinance Institution is able to grow to 80,000 customers in year is it has good technology backbone. In India Microfinance sector serves very large population distributed over small number of groups scattered over wide geographical areas which makes it high cost intensive but appropriate software and hardware technology makes it within reasonable limit. Still sector is lagging behind in terms of technology.
According to survey of the information and communication technology in microfinance industry by Microfinance Insights revels that for Many MFIs availability of electric power was problem.
Severe problem of No Power Frequent Shutdown of Power Load Shedding but not too frequent NO problem
Internet connectivity is also a major issue in many MFIs. No Internet Connectivity Weak or uncertain Dial up Internet connectivity Strong Internet connectivity 10 % headquarter offices and 19 % branches of MFIs 72 % Head Offices and 32 % of field Branches of MFIs 18 % of Headquarters and 49 % branches of MFIs
In terms of technology in use, MIS is mainly used with 80 % MFIs have some king of software in use. 19 % MFIs use ATMs in their business while 10 % use PDAs with their personnel as means of communicating and transacting device. Also 8.5 % MFIs use Smart card and Bio-metric devices. Mobile Banking is also widely used as mobile enabled services where 78% MFIs prefer to use it to receive loan from customers while 51 % use it for making loan disbursement. Still MFIs are reluctant in spending their money for technology and infrastructure. 42 % of MFIs are spending less than 5 % of their annual expenditure on Information and Communication Technology (ICT) while 15 % MFIs choose to spend more than 15 % on ICT. Awareness of Technology in MFIs: Among MFIs ATMs, Computer and software technologies are widely used but they are less aware of technologies like PDAs, e-payment, Charge cards, Credit Scoring and Point of sale terminals. NO Name of Technology 1 24 hour call service 2 ATMs 3 Biometric Card 4 Charge Card 5 Credit Cards 6 Credit Scoring 7 E-payment of utility bills and taxes 8 Interactive voice response(IVR) 9 Internet Banking 10 Mobile Banking 11 PDAs 12 Point of sale(POS) Terminals 13 Computer 14 Software Source: Primary survey by centre for Microfinance Research Awareness % in MFIs 65 100 75 65 80 60 70 75 75 85 70 65 100 100
Benefits of use of technology: Easy Accessibility, Acceptability, adaptability and Accuracy are main benefits of technology. Responses of customers on various technological aspects are recorded below.
NO 1 2 3 4
Benefit of Technology
Percentage
5 31.8 6 60.0 7 72.0 8 70.8 9 28.5 10 32.0 Source: Primary survey by centre for Microfinance Research Conclusion: With the help of Technology, Microfinance sector can realize higher and sustained growth potential which is helpful for both Microfinance Institutions as well as peoples.
Easy Accessibility Cashless transaction Timeliness Less expensive to open bank account in remote area Less transaction cost Flexibility Accuracy Acceptability Fund Transfer Remote chance of fraud