A local IT firm, Angle Dimension, has developed new software to provide Information and Communication Technology (ICT) solutions to microfinance institutions.
The software will ease financial transactions and enable people in rural areas to access financial services.
About 66 percent of the population in Malawi is still unbanked.
Angle Dimension Chief Technology Officer, Henry Sauzande, said Aspect Financials 360 offers a suite of functionalities that are affordable and applicable to the whole microfinance industry.
“The system provides a unique, ubiquitous standard platform that supports the needs of microfinance institutions and financial cooperatives,” he said.
Sauzande said the system will also assist microfinance institutions to improve the effectiveness of their information management, as well as enhancing efficiency in their operations.
“With the advent of Aspect Financials, micro finance institutions are placed at an advantage of adopting affordable, accessible, and innovative management information systems that bring varying benefits, ranging from loan tracking to greater transparency and risk management,” Sauzande said.
He further said one of the main factors that prevent microfinance institutions from going to rural areas is the large geographical spread, low population density and small volume of transactions, which makes it more costly to operate.
Sauzande said microfinance institutions face a challenge to explore creative approaches to cut down cost while serving poor people, especially in remote rural areas.
“It is too costly to set up a physical branch. Traditional bank branches do not seem to be the answer for reaching small rural depositors and borrowers.
According to Sauzande, Fodya Sacco and Reserve Bank Sacco are currently using the locally developed microfinance banking system and the feedback has been overwhelming.
“The Aspect Financials 360 is able to integrate with other payment platforms like mobile money, the national switch and the banking systems to allow for cashless transactions and direct cash disbursements, directly from the system to the customers,” he said.