Enabling Microfinance institutions to scale up

Enabling Microfinance institutions to scale up

From start-ups to multinationals, every business wants to stand out from the competition by creating superior products, offering superior customer service and having the lowest costs. Gaining a competitive advantage is the name of the game for business owners. And this is the driving force behind the rising adoption of technology by business managers across the world.

In Nigeria for instance, microfinance institutions (MFIs) are increasingly adopting cloud banking technology, which is enabling them to scale their business and lower operating costs in ways that were not possible before. Cloud banking is eliminating manual, time intensive processes, automating reporting and giving managers the real-time portfolio data they need to understand their businesses – while making financial services more affordable for their clients.

Technology has equipped MFIs to save time and to provide more unbanked clients with financial services, supporting the Central Bank of Nigeria’s (CBN) focus on financial inclusion. Microfinance institutions have been leaders in bringing financial services to remote rural communities in Nigeria. With new technology, MFIs are now able to increase the number of clients they can service, expanding their rural reach and further driving financial inclusion across Africa.

An important example of a technology that has significantly helped MFIs in the areas of cost reduction and improved efficiency is Instafin, the flagship banking software from Oradian, a company headquartered in Croatia and operating from offices in Nigeria, Ghana and South Africa.

Since its entry into the fintech market, Instafin has enabled microfinance institutions (MFIs), cooperatives and credit unions to serve even the most rural clients affordably and effectively. In Nigeria, the platform has supported the growth of 22 microfinance institutions that together serve 650,000 clients with its user-friendly and affordable services. The SaaS (Software-as-a-Service) solution, Instafin, enables financial institutions to know and control their portfolios, so that they can transform inefficiencies into operational excellence, limited data into informed decision-making and stagnancy into growth.

According to the company’s co-founder and Head of Implementation, Onyeka Adibeli, Oradian, “Drawing on our deep understanding of the market and our customers, Instafin combines key functionality (administration, security, accounting, loan portfolio management, and deposit tracking) with state-of-the-art features in a user-centric and powerful way. With Instafin as the keystone, our customers can begin to reap the full benefit of the Oradian experience and to grow their businesses”.

A good example is the Instafin implementation for Development Exchange Centre (DEC), Bauchi State. Despite the infrastructural and security issues in North East Nigeria, the implementation of Instafin by DEC enabled it to grow the client base as well as open 26 new branches within a short period. Jubli Makka, Head of Microfinance at DEC highlights one of the advantages of choosing Instafin, “One unique proposition of the Instafin solution is that we do not need to buy licenses to get the other branches served. We only need to access Instafin through a Web browser, because it is hosted in the cloud so all the branches of DEC cue in their data, it’s that simple!”

At the Cashless Africa Expo 2017, Natalie Baatjies, Managing Director for Africa spoke about the need to reach the 2.5 billion unbanked people with solutions that can improve their lives “Despite the increased investment in fintech and all the hype, very few solutions effectively reach the unbanked. Fintech solutions based on smartphone technology are not a viable solution for last mile consumers in rural Nigeria, who don’t have access to reliable electricity or network coverage. And a $100 smartphone is not ‘cheap’ to the majority of Africans living on less than $2 a day”.

Master’s Touch, a relatively small microfinance institution showed a high growth rate after implementing Instafin. According to the Managing Director of the Company, Omen Bassey, the MFI only had one branch and 762 clients when they implemented Instafin but now, it serves over 11,000 clients across 13 branches.

A challenge to the country’s Information Technology (IT) sector is lack of local support from software service providers. Many of these service providers are based offshore, making it difficult for Nigerian subscribers to get immediate help when there is service disruption. Industry experts believe the lack of local service support has significantly increased downtime as well as revenue loss for companies using these platforms.

Oradian boasts a technical team which is always available and reachable to its customers within the country. The company’s co-founder and Head of Implementation, Onyeka Adibeli assured that the company will always work to ensure customer satisfaction. “We believe that technology is a means to an end but not the goal. We build solutions to problems, but often our customers need help defining which problems require attention. Our team of operations and technology experts work with our customers to streamline their operations and define the best use of Oradian technology. Once selected, we steer the organisation through the implementation process, using time-tested training and change management processes”, Adibeli said.

According to Titi Yakubu, DEC’s Executive Director, “The Oradian Head of Implementation gave us expert guidance throughout the process. Because he has 15 years of experience implementing systems at MFIs in Africa, we could trust Onyeka to advise us both according to our local needs and according to global best practices”.

These testimonies perhaps explain why the company was rewarded with two awards at the recently concluded Cashless Africa Expo held in Lagos. Oradian’s flagship banking software, Instafin, was named Best Microfinance Enabler Platform while the company also clinched the Microfinance Empowerment Recognition Award at the event.

According to organizers of the event, the awards are an acknowledgement of the company’s work in enabling microfinance institutions to reach the unbanked and provide Micro, Small and Medium Enterprises MSMEs credit to remote rural communities.

There is no doubt that the transformational impact banking solutions such as Instafin demonstrates the importance of fintech in redefining the banking landscape, finding solutions that improve banking experience especially among microfinance institutions, and enhancing financial inclusion.

Related Posts

Leave a Reply