Microfinance organisations should think more ‘21st Century’ and harness technology, social networking and crowd funding, experts from the sector have said. At a major European microfinance event in London last week, run by the Community Development Finance Association and the European Microfinance Network, commentators said new technologies should be used to help the sector become more sustainable and engage customers and investors. Caroline Mason, chief operating officer for Charity Bank, said: ‘We need to find very efficient ways for people to offer their time and money to people who don’t need a great deal of money. There are a couple of organisations like Kiva, for example, which are using technology as a way of doing this. [Something like this] could be quite interesting, it could be run by volunteers and it could be a way of getting people to lend money at scale.’Mason said we should be ‘thinking slightly differently’ and ‘in a more 21st Century way’ about raising money rather than ‘the old model’. Mason, who co-founded Investing for Good - which brokers investment in companies doing social good - was speaking in the ‘Big Questions’ session at the event titled ‘2010: A Changing Europe – Combating poverty, supporting enterprise’. Sue Peters, MD of investments at the Social Investment Business, who was also speaking in the session, said sites like Kiva appealed to investors. Kiva enables anyone to invest any amount over $25 in individual entrepreneurs or initiatives around the world. Peters said: ‘I think it’s really interesting because as an investor you choose the level of risk you want to take with your own money and the type of people you invest in. Most investors don’t get the opportunity to do that.’ In a later session Bernie Morgan, CEO of the CDFA encouraged the sector to use social networking and technology to interact with hard-to-reach customers. She said: ‘A lot of borrowers will be on Facebook and if they’re not, they’ll have mobile phones. We can access them in great numbers if we can use this technology. We can reach more people easily.”’
She added that, to engage further, CDFA was working with a technology company called Red Cloud, which is creating a pilot platform to enable customers to use financial service via their mobile. Other discussions at the conference involved lenders creating partnerships with each other so that more sustainability could be achieved through economies of scale. And presenters suggested microfinance lenders could team up with credit unions and encourage customers to save to ensure genuine removal from poverty in the future. However, it was noted that in some countries, particularly in Eastern Europe, microfinance lenders were not legally permitted to support savings schemes.
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