Building a Better ATM

Who: PRODEM FFP

Where: Bolivia

What: For half the cost of a traditional ATM, a network free, multilingual, voice-driven system for delivering banking services, and with no chance of forgetting your PIN!

In Bolivia, the PRODEM Private Financial Fund (PRODEM FFP), overcame substantial obstacles to extending their banking services to its remote customers by innovating better technology.

“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.” - WRI

Operating under the constraints that the costs of a traditional ATM network were too high and that many of its customers were illiterate or spoke Quechua or Aymara (languages indegenous to Bolivia), PRODEM built it own machine, the Smart ATM.

The PRODEM Smart ATM utilizes smart cards (to store account information, including account balance, which allows the ATM to forgo the network), fingerprint recognition technology (no PIN required), a voice driven interface in all three of Bolivia’s major languages, and a color coded system to make the transaction simpler (blue for withdrawal, yellow for account information, etc.). The cost is $18,000 per ATM, about half the cost of a traditional ATM ($30,000 - $40,000). Although the ATM does not appear to handle deposits yet (a much more complicated process than dispersing money and a much less common activity), customers are able to make deposits at a bank branch by using their Smart Card and fingerprint, no paperwork or ID required. According to the World Resources Institute, by the end of 2002 PRODEM had 50,000 smart card accounts.

Sources and Links:

WRI Summary - a summary article from the World Resources Institute
Multilingual Smart ATMs for Microfinance (PDF) - a Digital Dividends case study by UNC’s Yerina Mugica and Roberto Hernandez
An Interview with Yerina Mugica - An interview with the author of the Digital Dividends case study
Serving the Poor Profitably in Bolivia - WRI article
PRODEM FFP - company website