Washington, DC -- At first glance, the largely illiterate and impoverished villages of indigenous peoples nestled in the rural jungles of Bolivia do not appear to offer substantial financial opportunities. However, one innovative company saw this vast segment of the Bolivian population not as an obstacle to economic success, but as an untapped opportunity.

The resounding fiscal and social achievements of PRODEM Private Financial Fund (PRODEM FFP) prove that developing technologies to better work with bottom-of-the pyramid customers can reap substantial profits for both companies and communities.

With a per capita income of US$950, Bolivia has long suffered as the poorest country in South America. Faced with skyrocketing unemployment, more than 61% of Bolivia's workforce operate in an informal marketplace, often as self-employed micro-entrepreneurs.

Their informal status and various language and cultural barriers, however, essentially bar these businesspeople from participating in the traditional banking system. PRODEM FFP recognizes this vast market and offers an array of savings, credit, and money transfer services to Bolivia's informal economy.

"PRODEM FFP has developed a globally applicable and extremely innovative approach to extending banking services to poor rural villagers who have been excluded from the banking system," said Dr. Allen Hammond, vice president for innovation and director of the Digital Dividend Project at the World Resources Institute (WRI).

PRODEM FFP was confronted by many unique challenges as they devised a business plan to provide high quality services to their target customers.

The lack of communications infrastructure in rural Bolivia renders a conventional ATM network with a real-time connection an impossibility. About 27% of PRODEM FFP's customers are illiterate and a considerable number of their rural patrons speak only the indigenous languages of Quechua and Aymara. These rural villagers are also largely unfamiliar with the concept of a PIN or a personal identification code.

Instead of attempting to force Bolivians to adapt to existing technology, PRODEM FFP and strategic partner Innova Impresarial developed a ground-breaking Smart ATM technology that recognizes the unique lifestyle of their average customer.

Utilizing "smart cards," voice-driven commands in all three major Bolivian languages, color-coded touch screens, and digital fingerprint recognition technology, the Smart ATM system offers customers secure and straightforward access to their financial accounts in even the most isolated areas of Bolivia.

"[Appropriate technology serves as] a globally applicable and extremely innovative approach to extending banking services to poor rural villagers who have been excluded from the banking system."

The smart card, used for both ATM and in-person branch transactions, stores relevant account information and allows illiterate customers to conduct account transactions without creating deposit or withdrawal forms. Because the most recent account balance is stored on each smart card, the Smart ATM does not need to be constantly connected to PRODEM FFP's network. The fingerprint recognition system also creates a biometric identity for each customer and functions as the security equivalent of a multi-digit PIN.

While the Smart ATM's multiple-language, voice-driven interface and color-coded system were designed to reflect PRODEM FFP's commitment to the empowerment of Bolivia's indigenous and rural communities, their ease of use has also made them popular among younger, more urban customers.

Because many of the technologies were developed locally, each Smart ATM costs only about $18,000 -- compared to the $30,000 to $40,000 price tag of standard ATMs.

A PRODEM FFP smart card account includes an annual fee of $7 with no transaction charges. The number of accounts has more than tripled in the last three years and stood at more than 48,000 in August 2003.

Dr. Hammond's Digital Dividend Project initially identified PRODEM FFP as part of their mission to promote sustainable solutions for bridging the global digital divide. The efforts of the Bolivian fund were publicized in a recent business case produced by the Digital Dividend Project.

According to Dr. Hammond, the case study has been instrumental in facilitating South-South knowledge transfer from PRODEM FFP to a group in India who is strongly considering the use of the Smart ATM technology.

The success of PRODEM FFP is a clear indicator that, through the application of the latest technologies, bottom-of-the-pyramid customers can be served both respectfully and profitably.




Contributed by Peter Denton, managing editor of World Resources Institute Features, an international news features service on environment and development issues. Reprinted with permission from the World Resources Institute.

To read another Global Envision article about how technology can help the poor, see Women Find Reason for Optimism in Internet Usage.