The winds of change are sweeping through the microfinance industry’s technology landscape and they are loving it. Fintech aims at integration, visibility, and accessibility, which are the goals of pioneer microfinance institutions. Fintech enables MFIs to enrich their functioning. However, the effects are multi-layered and not always a quick solution.

MFIs are mandated to provide their range of financial services to poor but enterprising women. Most of VFS Capital’s clients live in rural India and have seen financial struggles up close. However, many families who are most in need of our assistance cannot access it because of logistical hurdles. The adoption of technology in microfinance gives these families a chance to clear these hurdles. Committed MFIs, using technological strategies and devices, can reach and serve communities that were so far inaccessible.

MFIs must commit a big chunk of their resources to the process of verifying a client’s identity and needs. By using fintech, the verification process can be digitized and digitalized, making it considerably time- and cost-effective. Multiple levels of the microfinance industry can be transformed for the better with the use of technology in payments and management. The time and cost that are saved can be spent on upgrading the abilities of MFIs to uplift society.

MFIs have improved their visibility and transparency by taking to automation and digitalization. Technology simplifies and standardizes procedures that start from the time a prospective customer enquires about a loan, to the application, approval, collection, and follow-up. Consequently, real-time record-keeping and tracking minimize the chances of human error.

The use of technology also solves a pervasive problem: discrimination. Streamlining procedures using fintech is a step towards diversity and inclusion as it reduces the chances of bias.

However, with such benefits come several responsibilities. The MFIs have to train those responsible for handling the processes. The MFIs have to ensure data privacy, given that data is money. MFIs have to bear the burden of ensuring that these requirements are met.

It may take some time to adopt fintech in management and decision-making, and use artificial intelligence and other progressive technologies, but MFIs are already maximizing the potential of using fintech in rationalizing routine procedures and due processes.