IBM and CARE Partner to Advance Microfinance in Africa

IBM and CARE Partner to Advance Microfinance in Africa

IBM (NYSE: IBM) and CARE today announced plans to enable microfinance institutions (MFIs) in Sub-Saharan Africa to dramatically lower the costs of providing financial services to previously unbanked populations in the region.
The two organizations will jointly establish an Africa Financial Grid built around a shared services and infrastructure model designed to help MFIs reduce operating costs, streamline lending processes, scale rapidly, and integrate with other resources such as credit bureaus, financial institutions and international payment networks. The Grid will also eventually be able to flexibly link with telcos or other mobile payment providers in Africa to enable customers to repay loans or carry out money transfers via mobile phones or other devices.

Over the next ten years, the Grid will help millions of people in Africa tap into the economic opportunities that microfinance can provide. The Grid will also help MFIs expand into additional financial services such as micro-insurance, bill pay, credit scoring and history, and international remittances. The project will initially target 11 countries with a combined population of more than 400 million people. As CARE and IBM build out the Grid, open platform technologies and standards will be used wherever possible so that additional third-party services and capabilities may be offered.

“Microfinance is crucial for sparking economic development in emerging markets,” said Mark Harris, country general manager for IBM South Africa. “Hundreds of millions of people on this continent live on less than $2 per day, so access to even the smallest of loans can make a huge difference in helping entrepreneurs establish or expand their self-supporting operations. In the past, it has been cost-prohibitive for most lenders to target this market, but the combination of technology and expertise that IBM and CARE bring to the table will help overcome those barriers.”

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