Microfinance-a set of financial services targeted to poor and low-income individuals and households who are disproportionately excluded from the financial services offered by the conventional banks, financial institutions and financial services providers (FSPs). Since 1970 Microfinance Institutions (MFIs) in Bangladesh have been influencing the livelihood of 39 million clients, in particular, low-income and bottom of the pyramid segments of the society whose financial needs are constantly ignored/overlooked by the conventional banking approach.

Nearly four decades Microfinance Institutions (MFIs) in Bangladesh have been impacted the lives of millions of people, in particular, the bottom of the pyramid segments of the society including women and Micro and Small Entrepreneurs (MSEs), however, till the last decade digitization was not a priority within the sector. Transforming customer base, the digital revolution in other sector and competition from other financial institutions including commercial banks’ agent bank initiatives, mobile financial services (MFS) and Fintechs have intensified in the low-income bracket individuals and households influencing MFIs to rethink their operation and mode of services delivery.

As the digitization of operation is gradually becoming a priority among MFIs in Bangladesh it has now become a timely affair to analysis how digitization could create access and positively impact the millions of underserved beyond their traditional channels.

Microfinance is the heart of the financial inclusion process for the last miles. It has been serving as one of the most effective poverty alleviation tools in Bangladesh for the underserved. MFIs can seek credit for providing affordable and easily accessible finance to the end mile clients for the years. Now it is time to redesign and restructure their operation, mode of services delivery and delivery channels preferably using the digital platform to maintain the future growth trajectory.

To read the detailed blog : https://uncdf.live/BDMFIs