The UN Capital Development Fund and BRAC jointly organized the second DFCG meeting on 27th February 2018 in Dhaka with a theme on ‘Mainstreaming DFS in Microfinance Institutions: Opportunity & Challenges.’

Technology plays a critical role at financial institutions and is a vital element of the innovations taking place to advance financial inclusion and MFIs are not an exception. Financial service providers’ use of technology can greatly improve organizational efficiency. Digitized portfolio management and record keeping systems, for example, improve a provider’s ability to accurately measure and understand the state of its organization, as well as report to regulators and funders. The widespread access to mobile devices and improvements to communications technology allow staff working in the field to capture and transmit real-time data back to the head office and provide their clients with updated information on balances and the status of pending loan applications, for instance. With technology changing so quickly, providers should continuously assess their systems and processes and identify ways technological advances may improve the way they do business.

Technology is also rapidly changing how individuals access financial services and interact with financial service providers. The spread of mobile/digital technology has paved the way for a new era of financial services in many countries. Agent networks and other technology-enabled businesses allow people to conduct many basic transactions, such as person-to-person payments, bill payments, deposits, and more, to take place without ever stepping inside a bank branch or MFI business unit.

Financial institutions and MFIs worldwide are transforming them to suit the digital transformation. In Bangladesh microfinance is a key Subsector of the financial sector and also poised to embrace digital technology. In the uncertain journey ahead what course microfinance should take? What are the challenges ahead? What benefit digital technology offers to MFIs and its clientele? These are some of the critical questions we need to ask and find the answers This thematic background provides a basis for a broader discussion among the microfinance and DFS stakeholders to engage for finding the right solutions for mainstreaming DFS in microfinance.