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Challenges of Innovative Financial Inclusion

This document explores the transformative impact of innovative financial inclusion strategies, highlighting the evolution of microfinance institutions (MFIs) into regulated financial entities. It discusses the entry of conventional banks into microfinance, increased competition, and the multitude of new products enhancing access to financial services. The role of community-based enterprises, mobile banking innovations like M-Pesa, and technology hubs, such as iHub, are underscored. Additionally, it emphasizes the importance of regulatory support, partnerships, and investment in fostering financial inclusion across Africa.

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Challenges of Innovative Financial Inclusion

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  1. Challenges ofInnovative Financial Inclusion

  2. Examples of innovation - Revolutionizing the sector • Transformation of MFIs into regulated financial institutions. • This has led to:- • Entry of conventional banks into the microfinance space. • Increased Competition • Introduction of many new products. • Increased access to financial services (financial inclusion) • Attraction of new capital from local financial markets and foreign sources. • Partnerships in new products • Reduction of interest rates

  3. Examples of innovation - Revolutionizing the sector • Examples of New Products • Value addition Community based enterprises, such as. • Community water projects • Leasing of small holder farmers equipment • Proliferation of investment clubs with links to microfinace, as suppliers of capital to CBEs

  4. Examples of innovation - Revolutionizing the sector • Mobile Banking Systems. • The famous M-Pesa made & continues to make big impression. • Current innovation: MFI/Bank mobile banking systems • Links to banking, payment systems & M-Pesa likes • Facilitating payments for goods, services & utilities • Opening access to many more customers • Over 2,000 entrepreneurs participating in the iHub • A forum (technology hub) - entrepreneurs who seek to leverage on mobile technology. • Developing solutions for MFIs/Banks & other sectors which will further open access.

  5. Examples of innovation - Revolutionizing the sector • Examples

  6. Recommendation/role for European Microfinance Platform members • Support Regulators to • Develop policies & regulations for mobile systems • Support innovation accelerator initiative – seeking to • Help stimulate a startup of technology based SMEs to provide services to masses. • Bring in Angel/seed capital • Mentorship to young entrepreneurs The Midnight Sun Group (innovation Accelerator), ihub & mlab – examples of players in this space. • To further deepen outreach: • Support funds that focus on smaller & rural based MFIs • Support activities that bring together investors & MFIs in Africa.

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