Microfinance Companies In Digital Space
Digital technology, including mobile-based digital technology, provides wonderful opportunities to improve financial inclusion for small and medium (SMEs) enterprises in nations that are still part of a developing economy.These SMEs globally number about 200 million in these countries, many of which do not have a proper system of credit services and basic savings in place. Often, one is forced to pay exorbitant fees for a limited amount of financial services. In this scenario, digital technology can definitely play an important role. An enhanced knowledge of how microfinance institutions can benefit from a technology-based digital financial system can help SMEs evolve. Some of the factors benefitting SMEs are as follows:
1. Operational efficiency:
Digital channels can be utilized for improved operations and to reduce cash risk. Cash-intensive lending models make an institution vulnerable during phases such as transit and storage. This also entails extra costs. Managing the various aspects of this risk factor also is a time-consuming process, when this time could have been put to more productive use. Mobile-based digital technology enables clients to repay loans with a few clicks, thereby avoiding cash-based risks.
2. Establishing channels of communication:
This story is from the February 2018 edition of Small Enterprise.
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This story is from the February 2018 edition of Small Enterprise.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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