Enabling low income workers access banking services & increase social empowerment.

The history of financial systems in the United States has shown that providing citizens with access to capital and the ability to save are key underpinnings of economic growth. Yet between 70 - 80% of the world's population has no access to even the most basic financial services, thereby distancing the goals of attaining economic development in many countries around the world while 1.7 billion working adults make less than US$2 a day1. 1 McKinsey & Company, 2005

Over the last 30 years, the microfinance industry has proven that the extreme poor are bankable. Not only do they repay loans, but they also do so with very low defaults and relatively high interest rates. MFIs can, and have, become commercially viable enterprises. At the same time, banks and entrepreneurs in developing countries are beginning to realize that there is a viable market for financial products among the vast unbanked populations of the world.

Microfinance institutions provide the poor with financial services and credit to help them manage risk, build assets, increase income and enjoy a better life. They provide small loans to candidates who have not traditionally been served by commercial banks, or who have been unable to access such services. These loans allow recipients to buy the tools, basic equipment and merchandise required to run their small businesses.

The first things recipients do with the returns from their loans, savings, and through the growth of their businesses is to buy better food for their families and to send their children to school.

TranZact a successful payments technology platform founded by Technology Associates has over the years responded to these challenges and put together a well integrated proposition from world class technologies to deliver path breaking solutions to the micro-finance sector. What more, we have enabled traditional commercial banks re-think their strategy and develop, deploy and successful deliver value-added banking products to the disadvantaged communities.

TranZact for the Microfinance industry is fundamentally customized to process loan payments, savings deposits, withdrawals and transfers. It is based on a combination of an industry standard payment transaction processing server, stored-value debit cards, point-of-sale (PoS) terminals interfaced such that data is sent directly to the MFIs' back-end accounting and general ledger systems.
Clients are issued with magnetic stripe cards that are linked to their individual accounts that maintain their savings and loan account balances. When ready to make a payment, the client swipes her card onto the PoS terminal, which routes the transaction data to the transaction processing server, updates account balances and prints a receipt.

Cash is exchanged between the client and the person responsible for the PoS terminal. The MFI's back-end system debits the PoS terminal owner's account with the corresponding cash value and credits the client's account online, real-time. All transactions are processed via the cellular network and reconciled immediately to the MFI's General Ledger systems where the transaction logs are maintained. The solution increases access and reduces travel and transaction times for borrowers.