Financial experts have said that for micro-finance banks to remain relevant and be competitive, they must improve capacity building, adopt and embrace digital finance as well as develop products beyond loans and deposits.
Founder/CEO K-Rep Group-Kenya,Kimanthi Mutua, while speaking yesterday, in Benin City at a workshop organised by LAPO Institute, tagged: “Digital Finance:
The future of Micro Finance Institutions and Banks in Africa,” said only new innovations in the micro- finance industry would drive the sector to become competitive.
He said adequate consumers’ education and protection, as well as, policy and regulatory framework can facilitate the needed innovation in the sector that will in turn boost innovation in the financial sector.
Mutua , who decried the slow pace of technological innovations in the micro finance industry, said policy and regulatory initiatives targeted at consumers’ protection and consumer education were important in considering digital finance for the MFIs.
He noted that changes were taking place against the backdrop of new financial inclusion policies and regulatory framework.
He added that,” Allowing different types of institutions to provide financial services in recognition of the emergence of a variety of players, as well as, providing consumer protection and consumer education in recognition of the risks associated with increased access to financial services and competition in MFIs is key. ”
Mutua identified financial technology, mobile banking, digital financial services as important for MFIs and banks.
Delivering the welcome address, Director General LAPO Institute, Kenneth Okakwu said that remarkable progress in digital banking model has been recorded by commercial banks, while micro finance institutions and banks were yet to fully harness the potential of the model in their quest to deepen financial inclusion.
“In the last seven years, through our innovative microfinance and entrepreneurship development products and programmmes, we have trained over 36,000 Nigerians,” Okakwu said.