Impact Assessment

PRODEM's ATM and Point of Sale Network in Bolivia, IFC, 2005

    In 2003 IFC provided a grant to the Bolivian Private Financial Fund of the nonprofit microfinance institution PRODEM (FFP PRODEM) to have automated teller machines (ATMs) built and customized for illiterate populations speaking three native languages and to launch a point-of-sale (POS) network. The goal was to increase the number of clients by offering greater access and convenience, particularly to the rural populations in Bolivia.

    This issue of Monitor summarizes the successes and lessons learned from this information technology project. In general, the collective benefits of the ATM network demonstrated its value and the need to extend the infrastructure by linking to other systems and adding products. The ATM network attracted a significant number of clients, including previously "unbanked" populations.

    Methods for info gathering
    The evaluation was conducted by independent consultants, relying on responses by staff of the implementing agencies to specific information requests, as well as customer interviews, IFC reports, and relevant industry documentation.

    Summary of results
    So far the ATM network has proved popular among PRODEM customers and has been rolled out to far more of the MFI's branches than initially expected. By reducing transaction costs, it has saved PRODEM money. To further capitalise on their potential to increase access to finance, it is recommended that PRODEM's (the MFI's) ATM network is linked to the wider national ATM infrastructure.

    One of the principal changes that the programme faces are the use of appropriate technology including the adoption of a user-friendly interface for point-of-sale (POS) card readers. In addition, there was initially a failure to properly align incentives for vendors to utilise the POS technology. Initial POS product features and transaction limits were deemed inappropriate.