Broadband for Barefoot Bankers (B4BB)

Microfinance is a globally proven sustainable system, used both to promote economic development and alleviate poverty. Low-income populations, which normally would not have access to any formal financial services because they lack sufficient collateral, can receive small loans from microfinance institutions to start their own economic activity or business, thereby generating their own income. These small business owners, or micro entrepreneurs, can also have access to saving services. For the purposes of this project, we called the microfinance workers "barefoot bankers," a term borrowed from a time when China had “barefoot doctors,” non-professionals who were not usually part of the formal hospital-based health system, but who were trained to use locally grown medicinal materials and basic diagnostics to serve China’s rural areas in teams that made regular visits to villages.

While microfinance is both endorsed and promoted by the government, its power in China remains largely untapped because microfinance programs do not have adequate tools, systems or technologies. Therefore, technological solutions and expertise have a critical role to play in strengthening China’s microfinance sector. Information and Communication Technologies (ICTs), which the Chinese government’s "informatization" drive firmly embraces, can catalyze the operations and networking capabilities of microfinance programs across the country. Using ICTs to automate microfinance operations contributes to more sustainable local institutions—a key component in the pursuit of sustainable development—and to MFIs by giving organisations a more holistic view of their portfolios, and by making data-entry and record-keeping more efficient; this in turn makes each loan officer more efficient and able to process requests from more clients. These MFIs are empowered by the use of practical ICTs and consequently can offer financial and information services to greater numbers of poor people throughout China. 

Project Background

In February 2003, with support from the European Commission’s Asi@ITC Programme, PlaNet Finance China formulated and launched a first project called "Transfer of IT&C skills to strengthen the microfinance sector in China." The Broadband for Barefoot Bankers (or B4BB) project later grew out of the collaborators’ experiences during that first 18-month project. B4BB itself came to term in mid-2006.

B4BB aimed at building the capacity of the China Foundation for Poverty Alleviation (CFPA). PlaNet Finance China deemed this Chinese MFI (with NGO status) to be capable and ready for ICT upgrades. It is one of the most professional microfinance programs in China, with multiple operations in Beijing and a strong presence in the field.  CFPA is slated to become the leading microfinance organisation in China if it is able to improve key practices and go-to-scale with its operations.

The Broadband for Barefoot Bankers Projects delivered the following:

• Establishment of three Digital Hubs (technology learning centers) in rural areas of China: Zuoquan Digital Hub in Shanxi province, and Fu’an and Xiapu Digital Hubs in Fujian province.
• The first successful off-the-shelf Management Information Systems (MIS) implementation in China, using the Kredits System.
• Modification of the microfinance Web Portal to report on B4BB progress and findings.
• Seminars fostering communication and promoting Public-Private Partnership between China and Europe.

Because of B4BB, a loan officer in Fu’an can get online to email his manager or track loans in his client portfolio; a government official can read news about the achievements of successful borrowers on the PlaNet Finance China website; a microfinance accountant in Beijing can generate quality reports by using a few mouse clicks to see the portfolio at risk in each rural branch.

PlaNet Finance China’s Role  in the Project

PlaNet Finance China trained the barefoot bankers of CFPA. The term “barefoot bankers” describes the men and women who work on the front lines, at county-level microfinance institutions in China. They are the most important "troops" in the army of people fighting poverty with the microfinance methodology. Barefoot bankers are typically 25-45 years of age, with a high school or vocational college education, but generally with little formal job training and almost no knowledge of the international microfinance movement. The bankers are always natives of the local region in which they work. This means that they have key insight into the livelihoods and needs of the poor people in the areas that they serve. As one barefoot banker said, "Of course I understand the needs of the farmers I serve… I used to be a farmer myself!"

If barefoot bankers can be trained to manage and distribute their loans effectively, they will serve greater numbers of poor people and build strong, long-lived institutions. In contrast, if barefoot bankers lack skills or discipline, experience shows that their institutions will fall victim to fraud and the misallocation of funds. The poor will continue to suffer.

Training Methodology

PlaNet Finance China held customized training sessions for specific organisations according to their needs and the level of experience of their staff. In these sessions, we offered interactive classroom-based training, facilitated by knowledgeable trainers from PlaNet Finance’s international network as well as from PlaNet Finance China.

Our Training modules were as follows:

Basic Microfinance:

Introduction to Microfinance
Client Selection
Institution Building
Human Resources
Products and Services
Basic Loan Management
Supervision and Monitoring

Operational Microfinance:

Daily Loan Operations
Profitable Microfinance Management
Accounting and MIS (Manual Bookkeeping)
Computer Basics for Microloan Officers
Computer Maintenance
Accounting Software Selection and Use
Using Email and Search Engines

Project Impacts

Barefoot bankers were taught basic computer skills, enabling them to use computers to better process loan applications, serve more clients, and facilitate information flow to farmers in rural areas.
Other target groups (numbering in the thousands from the local communities) included microfinance clients, factory workers, elderly people, students, teachers, nurses, and civil servants from local administrative bureaus who also benefited from:

• Better access to technology.
• Mentoring on the use of computers and what information is available on the Internet.
• Increased inclusion in the “informatization” of rural China.

The CFPA was able to install 20 computers at each of its three branch offices and benefited from the increased computer literacy of its field staff. At the Beijing headquarters, the management team increased its technical knowledge and expertise in MIS. The CFPA moved from a costly, dysfunctional MIS to an off-the-shelf product with a proven track record and excellent technical support and follow-up. It has experienced significant gains in efficiency and accuracy using the new MIS.

B4BB contributed to:

• Leveraging entrepreneurial spirit, increasing economic opportunity, and boosting rural productivity. It empowered poor and low-income farmers in China and enabled their participation in China’s rapid economic growth through the construction and management of the Digital Hubs.
• Bringing the practical benefits of ICTs to remote regions in China’s underdeveloped markets. It strengthened local microfinance organizations and supported their efforts to reach deeper into local communities of farmers and small business-owners through the construction and management of the Digital Hubs. It also successfully implemented a new MIS.
• Stimulating an open dialogue among Chinese and European citizens, NGOs, and research institutions through the work of French, Spanish and German consultants in China.
• Fostering Public-Private Partnerships between government and corporate institutions through the participation of Microfinance Corporation.
• Disseminating learning processes and programs to the wider ‘ICT for Microfinance’ sector on the web portal.