Study of delivery of financial services in rural areas through ICT

Abstract

Abstract The objective of our study is to evaluate the current delivery models for financial services to rural areas through ICT in terms of their effectiveness, sustainability and viability. In this report, we have focused on a specific financial service offering (microfinance) that has attempted to use an ICT-enabled delivery model and assessed the effectiveness, clarity of the value proposition offered to the various stakeholders and the advantages and shortcomings of using such a model. To do this, we start with a high-level overview of the trends in providing microfinance to the underserved populace in the rural areas by different organizations and highlight the espoused factors for success in delivering the service through ICT. This paper attempts to evaluate the Simputer-based pilot project underway at Sanghamithra Rural Financial Services with the help of Myrada and other participants. The project’s outcome so far has been analyzed from the perspective of the various stakeholders, the ICT solutions used and the shortcomings in the technology / processes needed to adopt this system. We also have made an attempt at generalizing the constraints faced by an MFI operating at this scale to adopt an ICT-based solution effectively.