Microfinancing Goes Open

Microfinancing - making small loans to many people, especially those traditionally unable to obtain loans - is about decomposing money: breaking it up into smaller bits for more efficient use. The same could be said about the distributed development technique employed by open source. So it's good to see the two coming together:

A Nobel Peace Prize-winning organization has sparked the creation of an open source project to help build technology infrastructures for non-profit microfinance institutions. In developing countries around the world, these institutions loan small amounts of money to women who want to start businesses and create a better life for themselves and their families. The Mifos Software Initiative debuts this week at the Global Micro-Credit Summit in Halifax.

The Mifos Software Initiative has been created by the Grameen Foundation:

to address the microfinance industry’s information management challenge. The Mifos Initiative delivers an open source information management system for the global microfinance industry via a collaborative development and support community.

The Mifos Initiative is a new approach to technology that puts the control of technology in the hands of the MFI [microfinance institution]. The open source framework allows microfinance institutions to select locally based development and support services to assist with customization of their software, maintenance and implementation support services. Previously, this level of control could be met only by building and maintaining their own system, which is extremely expensive and therefore not accessible for most MFIs.