A Better Way to Wire Cash Home?

Microfinance International (MFIC) is an upstart headquartered in Washington D.C. attempting to challenge the dominance of Western Union in the remittance sector since 2003. Many Microfinance organizations, including partners of Katalysis have been offering this financial service, but Atsumasa Tochisako is adding a spin by implementing new software to facilitate the process. Formerly Japanese banker in Latin America, he is now heading this organization, in an attempt to prove that a financial service company can benefit the poor and still make money.
According to numbers from the Inter-American Development Bank [IADB], “Remittances sent to Latin America and the Caribbean from all parts of the world are expected to exceed $60 billion in 2006, surpassing both the amount of official development assistance and foreign direct investment to the region.” MFIC charges approximately $10 to transfer $200-$1500, whereas Western Union charges $50 for comparable services.
The most significant aspect of the service MFIC offers is that it allows for microfinance institutions in developing countries to process the remittances through a network developed through ARIAS software. This platform brings down the cost of transfer, extends formal finance services to a broader clientele, and all requires no more than a computer and the Internet.
Kai Schmitz, executive vice-president and chief operating officer of MFIC notes “becoming profitable quickly was important for us – to set a standard for other companies that would like to do this.” The company is looking to break even mid-2008.

For full article: Business Week