Back in the 1850s, pundits were telling would be entrepreneurs to "go west, young man." The west has long been won, though and experts agree that today the big entrepreneurial challenges are in the east - the Far East, that is, with India, in particular, seen as the new "land of opportunity." Thanks to the cheap and easy identity authentication system developed by Israeli startup Classifeye, hundreds of millions of low-income Indian residents are about to get a major push into the middle class - enhancing the world economy with new demands for goods and services, just when the developed world needs that boost most. For generations, third world societies like India have been sharply divided along class lines, with the poor sentenced to a nearly endless poverty cycle, with children following parents as sharecroppers, subsistence workers, and service workers. It's the same in much of the Far East and Africa but surprisingly, India's poverty problem is even worse than Africa's with 828 million people, or 75.6 percent of the population of 1.1 billion, living on less than $2 a day, compared to 72.2% in sub-saharan Africa, according to figures by the World Bank. While things have improved in recent years, thanks to the "Indian miracle" led by high-tech development and international call centers, poverty is still rampant. Most of the poor live in rural areas, which often have no running water, electricity, and other basics; and experts agree that generating growth in these areas is crucial to moving the country forward and helping the poor to thrive (http://tinyurl.com/5c6hge). If such growth could be achieved, however, the impact on India and the rest of the world would be enormous maybe enough to jumpstart the economies of the developed countries, who would rush to supply the newly relatively-affluent Indians with products and services to improve their lives. India, not having the same manufacturing or service infrastructure as China or the US, would be doing a lot of shopping abroad to satisfy the pent-up demand. With more money in circulation, economic activity goes up, lining the pockets of the poor with cash, giving more money to consumers and business alike. Providing credit to business owners and consumers is one important way to increase economic activity. But in places like rural India, where many people have trouble even getting enough calories to subsist on, the idea of getting a bank loan is akin to taking a trip to the moon. Most peasants have no idea how to go about it, and there are no facilities in place to provide them with money anyway if any institutions were willing to do so at all. Even instituting loans using UN or government money is difficult under these circumstances. One solution to this dilemma has been the rise of microfinancing - a system that provides credit and banking services to the rural poor, who formerly had to rely on the services of loan sharks, guaranteeing that they would remain in debt - and poor. The sums involved are small. But for many of the rural poor, an extra $100 will buy them the seeds they need to plant more crops, giving them more to sell at the market, helping their family move ahead and earning enough to pay back the loan. In India, microfinance is conducted by companies like Cashpor (http://www.cashporindia.net/), which has made thousands of loans in rural India since it was established in 1997. Like any other bank, though, the microfinance institution - which usually sends people out into the villages and farms where their clients live and work - needs to keep accurate records, and authenticate the identity of their clients. And this is where Classifeye comes in, says company CEO Rami Cohen. Classifeye has developed software which can use a cellphone camera to conduct biometric authentication of clients via their fingerprint! Clients hold their finger up to the phone's camera, and the image gets sent back to headquarters for comparison to a bank database. Once authenticated, the client has access to the full range of banking services, just like city folk who use a bank or credit card. Using the cellphone, cheap and portable, makes sense for authentication, says Cohen, but it was impractical until Classifeye developed its product. "Some cellphones have been made with fingerprint scanners, but cellphone manufacturers aren't going to put a feature like that on phones unless they know someone is going to buy them and relying on hardware forces users to either buy an upgrade or do without when the technology improves. Using a software solution makes much more sense," he says. All a client has to do, says Cohen is hold his or her finger up to the bank agent's phone (Cashpor has been using the technology for its rural clients), and wait for authentication. "We take remote control of the phone's camera to conduct the authentication, so the process is simple and secure for the bank and the client," says Cohen. While many governments and institutions in the west are willing to provide funds for microfinance operations, no one wants to see their money hijacked by criminals and the practical difficulty of making sure that the money is getting into the right hands has been a major reason why microfinance hasn't grown more quickly. "What Classifeye does is solve the practical problem of 'the last mile,' making sure that the money and services get to where they are supposed to," says Cohen. "We are providing a secure terminal for customers and bankers, with a high level of security - one that's almost impossible to compromises, since it's based on the precise science of biometrics. As a result, more money can get into the hands of the poor, and even the small amounts involved in microfinancing transactions can make a big difference." Right now, Cohen says, some 100 million poor people are part of microfinancing networks and by 2015 that number could reach a billion. It's a prime market, and with it's unique solution, Cohen hopes to be able to capture a good chunk of the business. Besides the deal with Cashpor, which has 350,000 customers (Cashpor is working towards expanding that number to 500,000), Classifeye is working to close deals with other large microfinancers, so that in the coming months, as many as one million poor Indians will be able to do their banking via Classifeye's authentication system. That impresses wary investors, who, having been burned badly in recent months, are being very conservative in their investments. "Having spoken to investors - VC's and angels - in the US in the past month, I have seen a lot of interest in what we are doing," Cohen says. Investors realize that India is a where the action is going to be and with Classifeye already having a foot and a half in the door (besides its Har Hotzvim headquarters, Classifeye has an operations center in Bangalore), the company's technology may turn into a major weapon in India's war on poverty.