Challenges ofChallenges ofInnovative Financial InclusionInnovative Financial Inclusion

Examples of innovation - Revolutionizing the sector

1. Transformation of MFIs into regulated financial institutions.• This has led to:-– Entry of conventional banks into the microfinance space.– Increased Competition – Introduction of many new products.– Increased access to financial services (financial inclusion)– Attraction of new capital from local financial markets and

foreign sources.– Partnerships in new products– Reduction of interest rates

Examples of innovation - Revolutionizing the sector

• Examples of New Products• Value addition Community based enterprises, such as.– Community water projects– Leasing of small holder farmers equipment

• Proliferation of investment clubs with links to microfinace, as suppliers of capital to CBEs

Examples of innovation - Revolutionizing the sector

2. Mobile Banking Systems.– The famous M-Pesa made & continues to make big impression.– Current innovation: MFI/Bank mobile banking systems

• Links to banking, payment systems & M-Pesa likes • Facilitating payments for goods, services & utilities• Opening access to many more customers

– Over 2,000 entrepreneurs participating in the iHub • A forum (technology hub) - entrepreneurs who seek to leverage

on mobile technology.• Developing solutions for MFIs/Banks & other sectors which will

further open access.

Examples of innovation - Revolutionizing the sector

– Examples

Recommendation/role for European Microfinance Platform members

1. Support Regulators to – Develop policies & regulations for mobile systems

2. Support innovation accelerator initiative – seeking to– Help stimulate a startup of technology based SMEs to provide

services to masses.– Bring in Angel/seed capital– Mentorship to young entrepreneursThe Midnight Sun Group (innovation Accelerator), ihub & mlab –

examples of players in this space.

3. To further deepen outreach:– Support funds that focus on smaller & rural based MFIs– Support activities that bring together investors & MFIs in Africa.