This makes it difficult to serve clients in very remote areas and drives up expenditures. Operational costs can be as high as 15 to 20% of loans, compared to less than 5% for banks in industrialised countries.
The introduction of mobile phone banking now makes it possible to reach millions of people, in a fraction of a second and without the high costs of establishing an extensive network of offices. Such cost savings are important for microfinance institutions, as they allow them to reduce interest rate margins while not impairing profitability. 6. These positive figures are truly good news.