The Grameen Foundation is creating open source software specifically for microfinance institutions. They say their software will help the poor by lowering transaction costs and fraud and speeding up loan processing. Operational constraints can limit the impact of microfinance institutions and the Grameen Foundation's open source software project is potentially a creative solution to a perennial problem.
Most microfinance institutions still use Excel-based or custom-built systems to manage portfolio and client information, and these types of systems can hinder efficiency or make it difficult to scale up operations to serve more clients. The open source framework is considerably less expensive than building and maintaining a customized system—an option that is out of reach for most of these providers of capital.
The success of this project is sure to be closely watched by IFC in particular. It has long called for more efficiency and more commercialization of MFIs. IFC's growing portfolio of loans for microfinance onlending has helped over 2.5 million microentrepreneurs.
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