Microfinance industries across the globe have come a long way. These institutions work as an incentive for small scale industries, small entrepreneurs, and other low-income clients. They provide financial services like small money loans, insurance, money transfers, etc. to that stratum of society that is unable to access or afford them. In Rajasthan, MP, etc., Arth microfinance has been playing a major role in developing and abridging the gap that exists between the poor and the rich. The advancement in the microfinance industry, mostly due to the digitization process, has made it more effective and efficient in its functioning.lamcorper mattis, pulvinar dapibus leo.
The digital transformation of industries is inevitable as the technological advancement has spread its tentacles to every nook and corner in the commercial world, and the microfinance industry is no exception. The adaptation of digitization in microfinance institutions has not been a very fast and smooth process. The application of new emerging technology along with the task of training human capital to utilize and get accustomed to this advancing change has been the most challenging aspect of this adaptation. Let us take a look at different steps towards the adaptation of digitization in the microfinance industry one by one:
DIGITAL RECORD KEEPING: The most common step towards digitization in the microfinance industry is building a digital data library of all the clients, customers, analysis reports of loans, outstanding dues, etc. The transformation from physical to digital records have proved to be very beneficial. By linking identity proofs like Aadhar Card in India to customer’s accounts, microfinance companies and industry have been satisfying their needs and concerns for data keeping and security.
DIGITIZE PAYMENTS AND LOANS INTERNALLY: Other than that, microfinance institutions are trying to digitize the internal system. Although the groundwork which focuses on connecting with the real beneficiaries remains unorganized and manual, our own internal processing has become digital, which saves time and manpower.
The challenge still remains in the rural part, where very few people have access to smartphones and digital knowledge, and most proceedings have to go slow and manual.
DIGITIZING CUSTOMER MANAGEMENT SYSTEM: Digitization has also boosted the process of customer management. Staff can now publicize new schemes and products easily through digital platforms. Switching from physical to digital means of qualitative research for customer behavior and their demands and grievances is also a very common step in the process of digitization.
The process of digitization in microfinance services has brought a transformational and phenomenal change. The prospects of digitization have been more on the positive side as the basic human-centered approach followed by the microfinance industry has not been compromised. Moreover, these institutions have been taking measures to educate clients and customers to get familiar with technological changes. It is very certain that as the world moves towards a more advanced digital revolution, the microfinance industry will have to make changes accordingly. Otherwise, the threat to its relevancy in the present economy and business market may lead to its degenerative perish.