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Promoting Inclusive Markets and Financial Systems

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Spotlight on Financial Inclusion Leaders Series: The Advance of Mobile Banking in Ecuador

by on Sep 29, 2014  |  posted in Uncategorized  |  1 Comment

SEEP is pleased to continue our series of case studies developed with support from Citi Microfinance titled Spotlight on Financial Inclusion Leaders. This series profiles selected microfinance associations, showcasing the ways in which they are supporting their members and meeting the challenges of value-added growth in financial inclusion. These associations are leaders in implementing innovative and locally-responsive approaches to financial inclusion. Their work is having a clear and measured impact on the lives of their clients, and their experiences bring valuable new knowledge to the industry at large.

RFR Case Study Cover ImageThe third installment in the series is available now!


Since early 2012, Red Financiera Rural (RFR) has been leading a mobile banking initiative that has provided 382, 220 rural Ecuadorians with greater access to financial services and products through July, 2014.

Prior to this initiative, rural clients often had to travel substantial distances to conduct any financial transactions, with significant time and monetary costs incurred. RFR’s initiative employs technology-enabled solutions, including mobile banking and transaction networks, to bring financial services to remote areas and directly into underserved communities. As a result, rural clients can re-dedicate resources to their families, jobs, and/or agricultural production because financial institutions come directly to them, rather than the other way around.  

Red Financiera Rural (RFR) is an association of 47 diverse financial institutions in Ecuador. With the support of USAID, RFR’s mobile banking initiative currently engages 31 institutions nationwide, among them credit and savings cooperatives, credit and savings associations, and NGOs.  The program is open to any financial institution in Ecuador, whether or not it is a member of RFR. To be eligible, an institution is required to have a focus on service to vulnerable populations, which is in line with RFR’s mission and goals.

By serving as an aggregator of services for participating institutions, RFR has been able to substantially reduce barriers to their entry into the mobile services market. Typically, high start-up costs, maintenance of infrastructure, and the time and knowledge resources required to form and manage partnerships with technology providers can prove prohibitive to individual institutions, leaving them unable to develop and expand services for which there is high client demand. Owing to RFR’s facilitating role, financial institutions participating in the technology initiative are now able to offer basic services such as deposits, payments, loans, and transfers to clients at substantial savings, thereby meeting client demand, enhancing financial inclusion, and optimizing their own sustainability.

Key Components of RFR's Mobile Banking Initiative

1. Core banking on the cloud:  RFR utilizes an Authorized Service Provider (ASP) model to power its core banking infrastructure via cloud computing. On the “cloud,” financial institutions have access to data storage and real-time transaction services, which are available for a monthly fee based on storage size, transaction volume, and other factors. This system, which is less dependent on physical infrastructure than traditional IT systems, brings significant cost savings to RFR. It also affords the opportunity to easily take advantage of cloud-based technological innovations, and facilitating the provision of mobile banking services to clients.
2. Transactional kiosks operating in remote, rural areas:  RFR currently hosts and maintains a network of 31 transactional kiosks throughout the country. Individual clients and financial institutions are able to conduct cash-in, cash-out banking transactions at these kiosks. The kiosks are securely connected via internet, cellular networks, and/or satellite to the core cloud banking infrastructure hosted by RFR.
3. Use of smartphones and tablets by loan officers:  Loan officers are equipped with digital tools that enable them to carry out financial transactions at the client’s location. Using smartphones or tablets, officers can access client data in real time to facilitate loan disbursements, collect loan payments and savings, perform loan assessments, and render other services remotely. Virtually all client transactions, data, and visit records may be securely stored electronically and be immediately accessible via a portable, small device.

Read more about RFR’s efforts—including the role of other key stakeholders in the project and results achieved to date—in the full article, available now!

Click here to access a PDF Download of "The Advance of Mobile Banking in Ecuador." (English)

Haga clic aquí para leer y descargar una copia de "La banca móvil para la inclusión financiera en las áreas rurales de Ecuador" (Español)

Stay tuned in the coming weeks for the final installment in this series:

  • Microfinance products for low-income private schools in Pakistan.

Catch up with previous articles in the series:

1 Comment

Shahariar says:
Oct 10, 2014

Ms Diana thanks for your your valuable writing. As micro finance practitioner this information will be very helpful for us. Though Bangladesh is the birth place of Microcredit program but MFI’s here are far behind from using technological innovation and facilities.
We are very much interested to learn more about it and interested to introduce it in our organization.

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