Monday, July 10, 2006

Using ‘smart cards’ to bank the unbanked

Wednesday, June 14, 2006 10:30am-12:00pm

Speakers: David Schwarzbach: Vice-President, Business Development Net1 UEPS Technologies, Palo Alto, California
Gautam Ivatury: Microfinance Analyst, Manager of the Microfinance Technology Program of Consultative Group to Assist the Poor
Chaired by David Roodman: Research Fellow, Center for Global Development

Mr. Schwarzbach began with a presentation on ‘smart cards’ or Net1 card. These cards are a new technological innovation to deliver financial services to people who do not have access to traditional banking facilities. The system is built around cards that provide both data storage and processing power. These cards use biometric information to protect customer’s information. Some of the services that these cards provide include utility services, medical services, insurance, money transfers, third-party payments, marketing. Customers can even use these cards to cast their votes. These cards are used by over 3.6 million people in Africa to receive welfare payments and access micro-loans. It is also being extensively used in Namibia. These cards can also be used to support evaluation of social programs.

Mr. Ivatury focused on the changes in microfinance projects because of technological innovations. He spoke about how such new innovations are changing the lives of people who previously had no access to banking facilities. He gave examples of villages and rural areas in South Africa and Brazil where people had to travel hundreds of kilometers just to withdraw cash from the bank or to pay bills.
He spoke of projects in Philippines which allow customers pay back their loans through cell phones. He mentioned projects in Brazil and South Africa which are moving away from traditional models of microfinance.
by Tahseen Alam

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