Linking Up and Reaching Out in Bangladesh: Information and Communications Technology for Microfinance

Microfinance in Bangladesh has reached maturity, numerous players and the largest number of clients in the whole world at relatively low cost and efficiency. Despite these successes, the operations of most credit institutions are still being manually done, client overlap is rampant, and there are many would-be borrowers that are currently not having access to finance. The introduction of a centralized ICT platform is intended to demonstrate, given the current international and local experiences, that the cost of providing financial services can be lowered further, institutions? back-end operations can be improved thus releasing credit officers from manual tasks to work more with clients, innovative services through ICT applications can be used to reach more people, and on-time information can be provided to management of institutions for strategic and operational purposes. The establishment of this platform also standardizes the information exchange and operations of the sector through the introduction of a common accounting mechanism, which is not the case now. The regulator would have up-to-data and on-time information for carrying out their regulatory functions, the government would have transparent information on market outreach to make appropriate policy decisions, and the sector would be integrated with the formal financial sector which is missing at the moment.