Addressing Predatory Lending Apps

[mouakter13]

Greater collaboration with fintechs is also beneficial for MFIs — in fact, it is increasingly a necessity, as they react to a global digital finance revolution driven by external factors they can’t control. MFIs in Bangladesh and around the world have realized that competition is coming from multiple directions, from banks, fintechs and other specialized financing institutions, which means their market share will shrink. They will need to develop careful strategies for the future, enabling them to leverage the innovations that fintechs can offer in digital savings and credit, along with other ancillary services like bill payment, money transfer, etc. — without korea whatsapp number data losing their customers or their niche within the broader financial services sector.

The potential for these partnerships is becoming stronger, as microfinance’s traditional customers in Bangladesh are increasingly receptive to digital finance. One need look no further than the pandemic-driven boost in agent banking, or BRAC’s success in disbursing digital cash transfers to help families during the lock-down, to see this shift. And it is quite evident that even those customers who are still averse to using digital devices or tools can be brought into the digital ecosystem, if we can ensure appropriate inclusion and impact through meaningful innovation. The looming synergy between the country’s two financial regulators, Bangladesh Bank and the Microcredit Regulatory Authority, should also help to embed digital innovation more firmly within the microfinance sector. As key actors in the industry move toward this inevitable market transformation, Bangladesh is certain to see new digital initiatives that prioritize customers’ needs, while focusing on convenience, cost and context.