Financial Inclusion Through Technology

The topic of the €100,000 euro European Microfinance Award  2018 is "Financial Inclusion through Technology" and is intended to highlight how MFIs can use technology innovations to expand outreach, broaden product offerings, improve the client experience, and increase operating efficiency, all guided by an unwavering focus on socially responsible finance. It seeks to illuminate how technology-enabled services can improve access to finance for low income and financially excluded clients – promoting financial service providers (FSPs) that offer innovative products and services capable of responding to users' needs for trust, speed, low cost, security, usability, and transparency, and become a standard-setter for the other players in the market.

Thank you to the 27 institutions from 22 countries, representing nearly every geographical region, who applied.

On the 20th of September, the Selection Committee for the European Microfinance Award 2018 chose the three finalists who will go on to compete for the €100,000 prize: Advans Côte d'Ivoire, ESAF Small Finance Bank from India, and KMF from Kazakhstan, for their different initiatives using technology to improve financial inclusion via improved service quality, outreach and productivity.

Congratulations and good luck to the finalists- the winner will be chosen from these three finalists by a High Jury and announced on the 15th November 2018 at a ceremony hosted at the European Investment Bank in Luxembourg, during European Microfinance Week

Read the press release here

Advans Côte d'Ivoire (Advans CI) is a NBFI in the Ivory Coast which offers payment, saving and credit services enabled by an Advans account linked to a MTN mobile money account. Advans CI has responded to traceability and safety issues faced by cooperatives paying cocoa farmers, as well as low school enrolment due to lack of regular cashflow among farmers, by offering its digital savings and payment solution, with wallet-to-bank and bank-to-wallet transfer services, enabling producers' cooperatives to make digital payments to farmers for their crop revenue. Since 2017, Advans CI has been also providing small digital school loans, based on an algorithm reflecting farmers' cashflows. Advans CI also successfully negotiated free MTN transfers between mobile wallets and Advans accounts for their farmer clients – the first time this had happened in Ivory Coast. The Selection Committee was impressed by Advans CI's thoughtful and holistic solution to an identifiable problem, and its negotiation on behalf of its farmer clients.

ESAF Small Finance Bank is an Indian MFI that is leveraging the rapid expansion of mobile phone and smartphone penetration in India to digitise a wide range of its lending processes, in particular customer onboarding, electronic applications, customer financial training, credit appraisal, in-field verification, mandatory customer identity and address verification using eKYC, as well as opening of accounts, cashless disbursement and paperless collections of loan repayments. ESAF's field officers use Internet-connected tablets with biometric identity verification and its clients have QR-enabled Aadhaar Cards – with Government-issued 12-digit unique identify numbers based on biometric and demographic data. Their details are automatically transmitted for credit bureau verification, and clients are given ATM cards to withdraw money in convenient tranches from any ATM. ESAF was commended by the Selection Committee for its huge outreach (over 2.3 million clients benefitting from these solutions) and its twin focus on back and front end solutions.

KMF is an NBFI in Kazakhstan that operates in one of the most sparsely population regions of the world, beset by unstable telecommunications networks in the remote areas where almost half the population lives. To reach clients and improve efficiencies in this challenging context, KMF uses tablet software, developed in-house, that communicates remotely with its core banking system to ensure that loan officers, management, loan recovery and internal control teams can schedule loan officers’ work, capture loan applications, make loan approval decisions, monitor and recover late loans, and conduct internal control visits in the field. Crucially in this context, this software can be used both on- and offline, allowing management to monitor field activities in close to real time even over long distances. KMF was noted for its development of its software in-house, and its response to the exceptional challenges of serving remote clients over such distances.

For further details on the Award visit the European Microfinance Award website

To learn more about the topic read NextBillion's blog: Bringing Technology to Microfinance in the Age of Data Scandals: European Microfinance Award Seeks Solutions

Photo credit: Martin Jumbe @ UNCDF-MM4P