one of the relizations i have come to working in the fringes of the international development community for the past 3 years is that if pressed to name one semi-“mythical” success of international development , many people will start talking about micro-finance.
Micro Finance is the practice of giving small (even tiny) loans to individuals and small busineses, letting them invest in a small business of their own, and later repaying the loan. It is in effect a bank that specializes in handing out loans to entrepreneurs that are so small, no traditional bank would touch them. The definition of small varies from community to community, but might start with money enough to buy a chicken, and start selling the eggs, and go all the way up to a few thousand dollars to start a small telecenter. The bottom-line is that most people seem to consider this form of development, a good example of sustainable, scalable aid which reaches some of the hardest hit orners of a society. It is also a type of project that has proven it’s worth in many different forms, in many countries around the world.
And for people like me who work with ICT’s (Information and Communication Technologies) for development it is fascinating because it is an obvious place to target for implementation of computer systems. After all keeping tabs on thousands of tiny loans is a daunting task without a computer system. One of the problems has long been that most software packages fro Micro Finance come from the traditional banking and finance software market, and are most often prohibitively expensive, or have been hacked together by a smal ngo somewher in the world as they gradually expanded their own microfinance services, and is hence anything but stable, adaptable and well documented.
This has lead me, and many others to the inevitable conclusion that there would be a interesting market for an Open Source, Free (as in beer and probably also as in speech) microfinance package with a well-designed, stable architecture, and good documentation. The problem, which is also the reason why good Open Source financial packages in general have been few and far between, is that most geeks like to work on software that interests them, especially when doing this work in their spare time. And few real geeks (at least ones that I know) supplement their interest in computers with an intense fascination of finance and bookkeeping.
So while I have spent some time agreeing ith other people in the ict4d space that a good open source microfinance package would eb a great boon, a serious development effort has yet to emerge.
But, acting either as yet another confirmation that the idea is sound, or (hopefully) as a starting place for actually developing this package, a project has showed up on Sourceforge.
From the Microbanking Open Architecture Project website: