LIVE FROM GSMA MOBILE MONEY SUMMIT 2011: Mobile finance vendor Fundamo – acquired by Visa earlier this month – is aiming to provide 40 million financially excluded Indonesians with access to financial services via mobile terminals as part of a new deal with the country’s Bank Andara, a wholesale bank for microfinance institutions (MFIs).
Dubbed AndaraLink, the duo’s offering is touted as the world’s first mobile-enabled microfinance services network.
The two partners argue that the microfinance sector in Indonesia is one of the largest in the world with over 50,000 MFIs, and that MFIs are essential in enhancing financial inclusion by offering credit, loans and savings services to consumers and businesses that lack access to traditional banking services. However, due to the low-income levels of the majority of the population, there has been little appetite to roll-out expensive banking infrastructure in these regions.
“MFIs need a fast, flexible, secure and innovative technical infrastructure to deliver financial services to a disparate populace in a cost efficient and scalable way,” said Irianto Kusumadjaja, COO & CIO of Bank Andara. “Instead of trying to reinvent the wheel, Bank Andara has combined existing MFI infrastructure with mobile technology to deliver new and enhanced services. These services help MFIs to boost financial inclusion and grow market share. On average the service has increased participating MFI revenues by 5-10 percent… AndaraLink has enabled simple and inexpensive mobile financial services between existing MFIs, providing businesses and consumers with remittance and utility payments. The network will also help us provide MFIs with quick and easy access to capital allowing them to offer credit at better rates.”
AndaraLink has already connected 90 MFIs in Indonesia and Bank Andara is targeting a total of 225 participant MFIs by the end of this year.