MICROCAPITAL.ORG STORY: The Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) Provides $4m Grant for Microfinance Technology Projects in Latin America and Caribbean

The Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) has approved a USD 3.95 million grant for a program promoting the use of technologies by microfinance institutions (MFIs) in Latin America and the Caribbean (LAC). The program, set to begin early next year, will cost a total of USD 10 million. MFIs in the region are invited to submit proposals, whereupon selected MFI proposals with the most “innovation and capacity to achieve measurable results” will receive support to develop and implement a technology strategy [1].

The program was launched at the Inter-American Forum on Microenterprise (Foromic), held in Arequipa, Peru, where selection criteria were initially laid out. An online portal will allow MFIs to submit their proposals and to share and discuss ideas and experience implementing projects with other MFIs. No specific information has been provided regarding the amount of funding individual MFIs will be allowed to receive or how many projects will be selected.

Ms. Julie T. Katzman, MIF General Manager, points to the importance of technology in extending microfinance, saying, “Technologies such as mobile banking or simpler banking software applications can help reduce costs and reach more people. We hope this [grant] will stimulate new thinking on innovative solutions and uses of technology that help truly massify the reach of microfinance institutions” [2].

The MIF is an autonomous fund administered by the IDB. Founded in 1993, MIF has approved over 1,000 projects worth USD 2.2 billion. The fund has recently started decentralizing its operations, giving IDB country offices more autonomy to distribute “mini-loans,” with the idea that a greater amount of smaller projects will reach more people. The MIF has 38 donating member countries from LAC, North America, Europe and Asia. The United States and Japan, each having contributed USD 500 million, play leading roles in the MIF [3].

Previous MicroCapital stories on microfinance and technology are found in the bibliography [4] [5] [6] and [7].

By: Stefanie Rubin, Research Assistant

Bibliography:

[1] IDB News Resease: http://www.iadb.org/news/detail.cfm?artid=5737&language=English&id=5737&CFID=181972&CFTOKEN=88579013

[2] Finextra.com: IDB Fund Provides $4m Grant for Tech-Based Microfinance Program: http://www.finextra.com/fullstory.asp?id=20583

[3] The Multilateral Investment Fund: About Us: http://www.iadb.org/mif/about_us.cfm?language=English#members

[4] MICROCAPITAL.ORG STORY: The International Banking Systems Online Journal Comments On How Key Stakeholders Influence Purchasing Decisions Of Microfinance Institutions In Relation To Information Systems And Includes Observations By Grameen Foundation, CGAP

[5] MICROCAPITAL.ORG STORY: International Banking Systems Online Journal Publishes Supplement On The Role of Technology In Microfinance And Highlights Importance Of Risk Management Systems

[6] MICROCAPITAL PAPER WRAP-UP: Financial Infrastructure: Building Access Through Transparent and Stable Financial Systems by the World Bank

[7] MICROCAPITAL.ORG STORY: Grameen Trust of Bangladesh Partners with Alibaba Group to Create Grameen China, With Initial Focus on Bringing Microfinance to Sichuan Province