Benin City — Financial experts have disclosed that in order for micro-finance institutes to remain relevant and be competitive, they must improve capacity building, adapt to and embrace digital finance as well as develop products beyond loans and deposits.
The Founder/CEO K-Rep Group-Kenya, Kimanthi Mutua, while speaking in Benin City at a workshop organised by LAPO Institute tagged, "Digital Finance: The Future of Micro-finance Institutions and Banks in Africa," said only innovations in the sector will drive it to become competitive. He said adequate consumer education and protection as well as policy and regulatory framework can facilitate the needed innovation in the sector that will in turn boost innovation in the financial sector.
Mutua, who decried the slow pace of technological innovations in the micro finance industry said policy and regulatory initiatives targeted at consumers protection and consumer education is important in considering digital finance for the MFIs.
He noted that changes are taking place against the backdrop of new financial inclusion policies and regulatory framework. He added that, "allowing different types of institutions to provide financial services in recognition of the emergence of a variety of players as well as providing consumer protection and consumer education in recognition of the risks associated with increased access to financial services and competition in MFIs is key." Mutua said the future of accessing financial services through physical branches is in dire trouble, just as he identified financial technology, mobile banking, digital financial services as important for MFIs and banks.
Delivering the welcome address, the Director General, LAPO Institute, Kenneth Okakwu, said remarkable progress in digital banking model has been recorded by commercial banks, while micro finance institutions and banks are yet to fully harness the potentials of the model in their quest to deepen financial inclusion.