Microfinance Plus: Investing Beyond Traditional MFIs

Digital finance, mobile money and other emerging technological innovations deeply transform the way MFIs serve and monitor their clients. Furthermore, the current COVID-19 crisis has created both opportunities and risks for the inclusive finance sector which started to develop and adopt innovative practices to deal with it. There is now room for new models beyond traditional MFIs, to meet the needs of the poorest using technologies that provide efficiency, cost and risk reduction, as well as the capacity to reach the most remote populations.

Impact investors are more and more targeting these new models of MFIs.  As they were better prepared to serve and follow up on clients in a world of social distancing these new players seem to adapt their activities more easily to the new constraints. In addition, some of these “new” actors show a less affected portfolio by the COVID-19 crisis than traditional MFIs.