It’s been almost 12 years since Muhammud Yunus and Grameen Bank won the 2006 Nobel Peace Prize “for their efforts to create economic and social development from below” through microfinance. Since then, what started as the revolutionary idea that a large global market exists for loans of around $20 has been both lauded for changing the world, and criticized for not alleviating poverty.

The majority of microlending banks now charge higher interest rates and promote larger loans. One reason for this is transaction costs, which can make issuing loans for less than $50 prohibitively expensive. This forces larger loans that many families don’t want and can’t handle, and can burden them for months or years. Larger loans also limit the types of products and product groups accessible with microfinance.

In the last few years, the widespread introduction of mobile money has helped lower or eliminate transaction costs associated with typical microfinance, and has incentivized entrepreneurs to court previously underserved markets. In addition to physical goods, we now see mobile money accepted by the service sector, rent-to-own technology, and energy service platforms.

The democratization of access to energy services began with solar lighting, and has expanded to LPG cooking (cooking with bottled Liquid Petroleum Gas). For example, my company, Envirofit, offers a new “SmartGas” service that lets users prepay for gas with their phone as they cook. These technological advancements allow families to pay for services they need and want on a daily or weekly basis. By allowing customers to borrow smaller sums and eschew rigid repayment schedules, the advent of nanofinance opens more possibilities for reaching the underserved than ever before.