Authored by Davy Denadi, Consultant & Hermann Messan, MicroLead Program Specialist

Over half of the world’s total adult population lives and works in the informal economy without access to formal and well-suited financial services. Although they informally can save, borrow and manage their day-to-day expenses with the little money they make, their financial choices are limited, expensive, risky and unpredictable.

But now, technology is playing an important role in the provision of financial services to these unbanked. Offering digital financial services (DFS) via mobile phones can help by providing a wider choice of services geared to all levels of the society, including the young, women and the less-well off.

In the midst of an ever changing financial landscape, financial service providers (FSPs) must be an active part of the digital finance transition taking place worldwide. By engaging in the digital transition, Togolese financial institutions can overcome the many challenges they face in the provision of their services – including limited access to underserved and non-served areas. MicroLead, a UNCDF program funded by MasterCard Foundation, is committed to supporting financial institutions in their transition to digital finance. Along that commitment, UNCDF initiated training on digital transition for financial service providers in Lomé, Togo from the 19th to 22nd of March 2018.

The four-day workshop was organized to reinforce the capacity of 33 top managers on "Business Models for Financial Service Providers Engaging in Digital Finance." Participants came from 20 FSPs, two mobile network operators (MNOs), two fintechs, two regulators (BCEAO, ART&P), and government-led entities involved in the provision of financial services. The training represented a unique opportunity for participants to learn basic knowledge and concepts of digital finance, the various types of digital finance partnerships for financial institutions, how to assess any partners before contracting with them, and the six paths of DFS business models as defined by UNCDF’s MicroLead program. In addition, this gathering allowed participants to review their strategic business planning with a focus on digital financial services.

The opening ceremony was led by the State Secretary of Financial Inclusion and Informal Sector of Togo, Mrs. Assih Mazamaesso and the Vice-president of the Board of the National Microfinance Association of Togo (APSFD – Togo), Mr. Komi Bassina. The UN system was represented by the regional MicroLead Program Specialist Mr. Hermann Messan. The State Secretary of Financial Inclusion and Informal Sector, Mrs. Assih Mazamaesso, expressed her gratitude to MicroLead for the support it provided in organizing the training session. She also pointed out that the capacity building activity is in line with the President of Togo’s desire and objectives set for the inclusive finance sector in the country.

MNOs and fintechs operating in Togo were invited during the training to present their technology/platforms along with their key functionalities to participants. It was a great opportunity for FSPs to learn about the wide range of technology available in the market, enabling them to make an informed choice when needed. The training captured the attention of many participants regarding why and how an FSP should go digital to increase its outreach and reduce operation costs. Mr. Pierre K. Gabian, Director of COGEC MFI mentioned that his MFI needs digital financial services to expand its operations and quickly reach the unbanked in remote areas, but the good news is that he is now well equipped to make a suitable business model choice for COGEC. Similarly, Mr. Tobias Gati, the Director of the Inclusive Finance Promotion Department said, “I am very pleased to attend to the workshop, it helps me to understand the strategical pillars of the digital finance business… and I am sure this critical knowledge we received will transform positively the microfinance sector in the country.” The training was a big step toward digitization of financial institutions in Togo, especially of microfinance institutions.

Download UNCDF MicroLead’s digital finance toolkits to learn more about the six different models of digital financial services.

About MicroLead

MicroLead is a joint initiative of UNCDF and Mastercard Foundation challenging regulated FSPs to develop and roll-out deposit services which respond to the rural vacuum of services. With additional support of the Bill & Melinda Gates Foundation and the LIFT Fund in Myanmar, MicroLead works with a variety of FSPs and technical service providers to reach rural markets, particularly women, with demand-driven, responsibly priced products offered via alternative delivery channels such as rural agents, mobile phones, roving agents, point of sales devices and group linkages. This is combined with financial education, so customers not only have access but can effectively use quality services.

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