MICROCAPITAL STORY: World Vision’s CREDO Signs Up for PayBox System in Georgia

World Vision Georgia’s microfinance organization, CREDO, has begun employing a new product distributed by the company, PayBox, as a means of collecting loan repayments from its clients. CREDO, which started it’s micro-lending operations in 1997 under the name “Georgia Entrepreneur’s Fund”, was founded by World Vision International and, as of January 2005, it has been owned by VisionFund International, a US-based private company under World Vision International. CREDO reports to the Mix Market with total assets, as of 2008, at USD 29.9 million [1], a grade BBB rating [2] from Microfinanza in 2007 and 21,857 borrowers [3] at the end of 2008. CREDO’s use of this new payment system will allow clients across Georgia to perform various monetary transactions at no charge, in multiple locations.

PayBox, owned by Sybase [4], a mobile payment service provider, requires a PayBox membership cards that will allow access to a member’s online user data. PayBox technology can be installed in an ATM machine, used at a bank kiosk, take the form of an online application or even accessed via a mobile phone. In the case of Georgia, it is an ATM-like stand which, unlike an ATM does not supply cash. This is not a micro-lending specific product and can service other financial and consumer needs, notably in the mobile payment sector. PayBox serves up to 5 million end consumers internationally in Europe, America, Asia, the Middle East and North Africa and works with ATM providers such as Servibanca Colombia and mobile service providers such as Vodafone[5].

Thousands, although the exact number has not been indicated, of PayBox machines have been set-up across Georgia and CREDO clients as well as the general public have both started using this newly adapted system to pay their mobile phone, internet and utility bills. These machines can be found in subways, shops, drugstores and on the street, functioning 24 hours a day, seven days a week. The goal is to decrease travel time and shorten lines for those residing in villages who have previously gone to nearby cities and confined their activities to banking hours in order to carry out these monetary transactions.

PayBox Technology can also make CREDO more efficient by automatically importing repayment data into its loan tracking database as emphasized by Ljiljana Spasojevic, CEO of CREDO Georgia [6]. However, no exact numerical estimates for cost savings have been reported and the exact financial agreement between PayBox and CREDO is unclear.

In order to market and spread the word on this new method of payment, CREDO has sent instant mobile phone messages (SMS) to all it’s clients with information about PayBox as well as distributed detailed brochures with explanation. Loan officers have also been on hand to inform clients.

The decision to use the PayBox system is in alignment with CREDO’s decision to move towards more rural-focused lending in the futures. ‘With this new technology we will enable clients in rural areas, where banking services or branches do not exist to access our products’, added Ljiljana Spasojevic [7].

By Aiwen Xu, Research Assistant

Bibliography :

[1] The MIX Market, CREDO profile,http://www.mixmarket.org/en/demand/demand.show.profile.asp?ett=1397

[2] Microfinance Gateway, Rating Report for CREDO Foundation,http://www.microfinancegateway.org/p/site/m/template.rc/1.9.31267/

[3] see 1 above.

[4] Ko, Carol, “Mobile Payment Solutions in Store for Mobile Operators and Financial Institutions”, www.mis-asia.com, http://www.mis-asia.com/news/articles/sybase-acquires-mobile-payment-pla… 22, 2009.

[5] PayBox, Vision, http://www.paybox.net/vision.html

[6] Vujosevic, Andrea, “New Payment System Benefits Microfinance Clients & Improves Efficiency”, www.meero.worldvision.org,http://meero.worldvision.org/news_article.php?newsID=1875&countryID=11,J… 16, 2009.

[7] see 6 above.