Information and communication technology and the sustainability of microfinance

Information and communication technology (ICT) is an important driver in the maturing microfinance industry. Microfinance providers, both non-profit microfinance institutions (MFIs) and for-profit banks, provide financial services to the poor that are critical for eradicating poverty and promoting economic development in developing nations. As the industry matures, MFIs face an increasingly competitive environment forcing them to balance the dual goals of outreach and sustainability. Interestingly, ICT may be both the instigator of this new environment and the potential solution to MFI survivability. We propose research directions on the role and impact of ICT in the microfinance industry, with special attention given to the industry’s stakeholders and to the value chain of microfinancial services that are provided to the poor people in the world who need access to them. This research is at the intersection of inquiry on ICT for development and the digital divide, the impact of microfinance on poverty and development, and the use of information technology (IT) in the financial services industry. It is aimed at encouraging new research that explores important issues with respect to microfinance services to open up a dialogue and debate among interested academic researchers, microfinance institution leaders, and public policy-makers. We discuss the role and impact of ICT at the customer level, the microfinance institutional level, the donor level, and the microfinance industry level, with insights that showcase the value chain impacts and transformations that are occurring as a basis for assessing the extent to which ICT supports the sustainability of microfinance.