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Abstract

The microfinance industry provides financial services to the world’s poor in hopes of moving individuals and families out of poverty. In 2013 there were 4.7 million active microfinance borrowers in Africa. This represents a smaller percentage of the population compared to other regions of the world, indicating the potential for rapid growth of microfinance in Africa. However, microfinance is maturing, in part due to the adoption of information and communication technologies (ICTs). This research examines how ICTs are changing the microfinance industry given recent advancements in mobile banking, Internet usage, and connectivity. By examining the microfinance market structure, we determine that ICTs impact intermediation and market structure among various players in the microfinance industry. We use recent industry risk reports from 2011 through 2014 to inform our predictions of changes to the intermediation structure of the industry. We give particular attention to the impact of ICT on microfinance in Africa.