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Smart Cards and Microfinance

How Do Smart Cards Work?
Achievements to Date


Putting Technology to Work for Poverty Alleviation

The Consultative Group to Assist the Poorest (CGAP) selected SKS for the prestigious Pro-Poor Innovation Challenge Award for SKS' initiative to introduce Smart Cards and Hand-Held Computers at the village level. SKS was one of four organizations in the world to receive the award, which is in the amount of US $50,000.

The Smart Card Project will revolutionize microfinance by overcoming a major problem for microfinance institutions (MFIs)-the high cost of delivering financial services to the doorstep of the poor. It will do so by using Smart Cards to reduce the time of weekly village meetings, thereby significantly increasing the efficiency of field staff, lowering costs of delivery, and enabling MFIs that target the poor to more quickly reach financial viability.

All MFIs face the problem of the high cost of delivery, but the problem is especially acute for MFIs that target the poorest of the poor because such MFIs typically work in remote, sparsely-populated regions where roads are not well developed. Therefore travel costs become prohibitive. Moreover, given the severe poverty of their clients, such MFIs typically have lower average loan portfolios, thus it takes longer to reach financial sustainability. Smart Cards will solve that problem.

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