The impact of IT on most MFIs has been less in comparison to the explosive growth demonstrated by IT and the microfinance sector in India. MFIS are increasingly realising the benefits of technology in areas such as information dissemination, awareness building, tool development and capacity building. Technical providers are also providing their assistance to MFIs. New entrants into the software provision sector is heating up the competition. This paper discusses the tremendous scope of improvement for MFIs with resepct to investment in IT. A range of project areas has also been summarised which can be developed further to improve the effective usage of IT in MFIs.