“Going forward, there is a strong case for the microfinance sector to adopt technology not only to improve efficiencies and reduce operational costs, but also to mitigate operational risks such as fraud, improve service experience, and raise customer awareness. Leveraging digital solutions can enable the microfinance lenders to increase their productivity manifold across the entire lending cycle,” said M Rajeshwar Rao, Deputy Governor, Reserve Bank of India, at the launch of MFIN’s India Microfinance Review.
Microfinance lenders with their high-touch models are best placed to handhold their customers for developing familiarity with technology which will enhance their awareness about the opportunities available to them. Rao added: “This way, the lenders can go beyond a transactional arrangement of just meeting the credit needs of the borrower to a transformational relationship with the customers resulting in positive externalities in terms of the social benefits. This will further ensure that access to institutional microcredit also enables the borrowers to explore opportunities for generating income in a sustainable manner, besides meeting their immediate needs for money.”