Saying that technology can be a vital tool for social and economic development, the local subsidiary of software maker Microsoft intensified its collaboration with microfinance institutions (MFIs) by extending $1 million worth of software grant.

The Redmond, Washington-based software giant made the announcement during a recent seminar for NGOs it co-sponsored with microfinance organization Grameen Foundation in Makati City.

Grameen Foundation, which is a recipient of the Nobel Peace Prize along with its founder Mohammed Yunus, hooked up with Microsoft to accelerate microfinance’s impact on poverty alleviation through the strategic use of technology.

Matt Duncan, director of the Grameen Foundation, said in a presentation that the organization’s technology center in Seattle has created an open-source information management platform which MFIs can implement for every country.

Duncan said the IT system, called MIFOS, can run Microsoft front-office applications such as Great Plains software. “This is the reason why we’ve also partnered with Microsoft,” he said.

Christopher Tan, country director for the Philippines of Grameen Foundation, said that while technology is a crucial tool for MFIs in finding valuable resources, acquiring them is a major stumbling block.

“The initial investment and maintenance required in IT systems explain why most MFis are not automated. This is where come in,” Tan said, adding that there are about 300 to 400 MFIs in the country.

The MFI seminar, titled “Fueling Growth: Strategic Technology for Microfinance,” provided MFIs them with a framework for adopting and using technology to expand their financial services to poor households.

It is the first in a series of education and mentorship forums for microfinance that Microsoft and Grameen Foundation plan to conduct in other countries in the coming year.

The Philippines was chosen as the launch market because of its leadership in the microfinance industry and advanced technology infrastructure, as well as the availability of resources on the ground to assist MFIs in adopting technology.