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Types of fintech solutions for microfinance (part 2)

One of the biggest potential for microfinance institutions lies in the ability to partner with fintech startups. The latter provide new solutions not only for mobile lending, but also new ways to harvest data on clients and cross-analyze them for faster and more informed loan decision processes. That is possible through deployment of tablets and digital field applications connected to cloud computing server.


Loan process digitization / partnerships with Fintech companies


Artoo provides an intelligent lending platform tailor-made for the needs of the Micro and Small and Medium-Sized Enterprise lenders.to screen SMEs and facilitate loan decision-making process, input customer data and do onboarding. A small Indian bank, Ujjivan, partnered with Artoo in 2012. The partnerships enabled Ujjivan to expand its customer-base from 60 thousand to 200 thousands clients. It also allowed agents to capture more data on clients leading, ultimately, to better quality of data for assessment of clients' profiles.


Alternative credit scoring


Underserved and underbanked populations very often rely solely on cash and do not have sufficient credit history. In such cases, microfinance institutions can turn to alternative credit scoring methods, using easily traceable data, such as GPS da



ta or monthly utility bills to create predictive models, using machine learning, to estimate the amount a person could borrow and the probability of loan repayment. One of the solutions in the developing countries would be to base alternative credit scoring on renewable/solar energy solutions' repayments.


A totally novel approach to credit scoring has been developed the Entrepreneurial Finance Lab (EFL) that pioneered psychometric credit screening tools to help stimulate entrepreneurial finance in emerging markets. This methodology was deployed by Russian Sovcombank for ‘first credit card’ program for young adults.


Digital financial literacy programs/ solutions


Arifu is an interactive SMS, whatsapp and Facebook chatbot providing a personalized way to learn skills, discover products and learn new information for underserved or underbanked customers.

Source: Arifu


In 2016, Arifu partnered with Mercy Corps Agrifin Accelerate to provide free financial management and agronomy training through SMS-based chat to thousands of farmers in Africa. The solutions not only allows farmers to be responsible for their own learning process, but it also provides data on learners' performance allowing to link them to specific services such as loans.



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