Kilde’s Post

This is a theory on #microfinance institution and #moneylenders in a segmented #ruralcredit market published in IGDR, co-authored with Abhirupa Das. Abstract: The effectiveness of microfinance institutions (MFIs) in rescuing poor borrowers from “clutches of” moneylenders has been a much-debated topic over the past few decades. This paper aims to contribute by presenting a model of competition between a socially motivated MFI and profit-maximizing moneylenders when market segmentation exists. A principal–agent model is used to characterize equilibrium conditions under different scenarios. We find unambiguous benefits arising when a welfare-maximizing MFI enters the market. However, there are benefits to having local agents like moneylenders on the ground who also have informational advantages. To the best of our knowledge, this study is the first to evaluate the competition between MFI and moneylenders under the framework of captive and noncaptive segments with a mandatory savings requirement. https://lnkd.in/gbSFzzWQ

In the last year, I worked with Samuel Ojietohamen to develop credit/default score models that will predict default amongst under-banked customers in Nigeria. We got profile and transaction data from the internal operations of Argon Financials, a fintech startup, focused on the underserved segments of the economy. The company (www.argon-financials.com) currently provides credit and wallet services for Traders, Fashion Designers (Tailors), and Farmers in Nigeria. Results showed our model was perfect for catching the good guys but what we wanted was a model for finding the bad guys. Argon's business model of giving credit had infused into it some community elements that have impacted its default levels and have made it very low (<5%). We worked with that data and worries of overfitting the model built from the data became rife as we strived to rebalance it. We stopped trying when it became clear that the model did well for the inputs we fed it and not for what we wanted it to do. We still think though that it is a worthy cause for default scores to be created for people on the continent so it can help the access equation because credit is the engine of most developed markets. But if I can not 'authoritatively' check the probability that my money will be returned, we may as well just keep the cash economy intact. 😂 😂 Now, we are open to working with organizations with a sizable form of 'balanced' data, so please do reach out if you are interested in partnering or know anyone who may be. In the meantime, please see below our thoughts and findings from the current work. https://lnkd.in/ewADV3_M #AI #ML #creditscore #financialservices #emergingmarkets

Bahrain Economic Development Board (EDB) Highlights Investment Opportunities at Money20/20 Europe Dalal Buhejji, Executive Director of Business Development for Financial Services at Bahrain EDB, said, “As we continue to work towards attracting investments into key sectors as part of Bahrain EDB’s mandate to foster an attractive investment environment, thereby contributing to economic growth and diversification, events like Money20/20 provide an ideal platform to showcase Bahrain’s thriving financial services ecosystem to key global decision-makers and investors. Our supportive environment, highly skilled workforce, and forward-looking regulatory frameworks continue to foster creativity, innovation, and opportunities for global investors looking to tap into the fast-growing Middle East region and beyond.” https://lnkd.in/eKESHwKk #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

You are the MVP! Going above and beyond is about stepping up our service delivery over 100%, as we do it properly and with STEEZE. It means doing what needs to be done and not only what is expected of us. The ability to go the extra mile to ensure 100% satisfaction thereby making a huge difference. We genuinely care about our work and want to make it the best it can be. Hence, the secret behind why we stand out at Good Neighbours Microfinance Bank. Being different from the competition has been made possible by going above and beyond. It has improved our company's capacity to take the initiative and apply innovation to create products that fit and satisfy the expectations of our customers. Here at Good Neighbours MFB, our clients come first. We respect our customers' opinions and make sure their suggestions are taken into consideration and promptly implemented. We spend time getting to know our clients and ensuring their satisfaction at all times. We are your GOOD NEIGHBOUR! Happy Customers Service Week! Bonny Ukenna Dr. Okey Nwuke Clementina Ajamgbe-albert Femi Adekeye, MCArb Tolulope Lawal #customerservice #customerserviceweek #customerservice2024 #happycustomer #aboveandbeyond #Microfinance #FinancialEase #EasyLoans #Microfinance #FinancialInclusion #GrowYourBusiness #businessloan #sme #msme #GNMFB #GN #wearegoodneighbours

#Islamic #Fintech Geographies: #Growth & #Investment Opportunities With the current #macro environment, access to capital to make the most of the opportunities may remain limited for the foreseeable future. However a recent #trend toward specialist funds in Islamic Fintech provides some hope to the sector notwithstanding that #valuations may be more #conservative and appetite for #capital intensive, low margin #opportunities may be limited. Better participation with Islamic Fintechs by Islamic #Banks and #Insurers is needed for Capital #Markets and #Insurance sectors to grow. Similarly #regions with low activity to date such as Sub-#Saharan #Africa and #MENA-Other may benefit from better #ecosystem development and #regulatory clarity to support #entrepreneurship in the #finance sector. 

Conquering the Crowded Waters: Red Ocean Strategies for Microfinance Institutions Microfinance institutions (MFIs) play a vital role in fostering financial inclusion and empowering low-income individuals. However, the microfinance landscape is becoming increasingly competitive, demanding innovative strategies for MFIs to thrive. Red ocean strategies, focusing on outperforming competitors within the existing market, can be a valuable tool for MFIs to strengthen their position. Key Red Ocean Strategies for MFIs: Product Diversification: Expand product offerings beyond traditional microloans to cater to a wider clientele. Savings products, micro-insurance, and money transfer services can attract new customers and increase revenue streams. Cost Optimization: Implement efficient operational practices to reduce overhead costs. Streamlining loan processes, leveraging technology, and optimizing branch networks can enhance profitability. Targeted Clientele: Focus on specific client segments with tailored loan products and financial literacy programs. This approach fosters deeper client relationships and improves repayment rates. Effective Branch Network Optimization: Strategically expand or relocate branches to enhance accessibility for underserved communities. This can involve utilizing mobile banking units or partnering with local businesses to reach geographically dispersed clients. #Microfinance #FinancialInclusion #RedOceanStrategies

We are delighted to announce a new collaboration with Doğan Investment Bank Doğan Yatırım Bankası to enhance supply chain financing for small and medium-sized enterprises (SMEs) in Türkiye. This partnership underscores our commitment to strengthening the financial sector and supporting sustainable economic growth in the Black Sea region. Doğan Investment Bank will leverage a state-of-the-art SME digital lending platform, developed in collaboration with leading fintech companies. This platform streamlines access to finance, offering efficient credit decisions based on behavioral and financial scoring. With this innovative approach, SMEs will benefit from flexible, timely financial support to meet their operational needs, helping them manage and optimize cash flow risks effectively. “We are pleased to expand BSTDB’s support for the Turkish economy through our partnership with Doğan Investment Bank, a newly established and fast-growing financial institution. Providing small businesses with the tools they need to become more competitive is vital for the sustainable development of the country’s economy. This collaboration, which includes supply chain financing and support for Doğan Investment Bank's digital lending platform, aligns with our strategic objectives to bolster the financial sector and support SMEs in the Black Sea region,” said BSTDB President, Dr. Serhat Köksal, at the signing of the agreement. More details at: https://bit.ly/41n98oB #BSTDB #DoğanInvestmentBank #Partnership #Türkiye #TurkishSMEs #SupplyChainFinancing #DigitalInnovation #SustainableDevelopment

Suman Chowdhury, our Chief Economist and Head of Research participated in an insightful panel discussion at Sa-Dhan Association's 'Building comfort level of Lenders & Investors to support MFIs' webinar. Below are his key takeaways from the webinar. 1. At a systemic level, better transparency and better quality disclosures ensure a healthy growth in the financial sector while maintaining financial stability. The regulators and particularly RBI, have been pushing for higher transparency and stronger internal controls, as seen from the regulatory actions taken over the last six months. 2. The quality and consistency of data received by the lenders and CRAs from the MFIs can go a long way in building higher trust and comfort. SROs should work with the lenders and CRAs to develop a common information template across the microfinance sector with well defined and standardized performance metrics (particularly on asset quality). The use of a common and standard framework will enable the CRAs and lenders to get better clarity and perspective from the peer financial comparisons, facilitating better credit decisions. 3. Most mid-size and small MFIs have adopted “responsible lending” at the ground level as our branch level visits have shown over the years. However, they are handicapped by the lack of a comprehensive end to end technological platform which can support easy extraction of business data without any manual intervention. SROs can work with tech vendors to develop cost effective technology solutions or arrange a capital subsidy which will make it more affordable for smaller MFIs to invest in such projects. 4. Most mid-size and small MFIs do not have the benefit of parent or group support, which can “notch up” their stand-alone ratings. Comfort on their governance standards, data systems and internal controls can however, help in offsetting that disadvantage at least partly and also start reflecting in improved access to a wider range of lenders and investors. Jiji Mammen | Dr. Saibal Paul #microfinance #transparency #disclosures

#Kazakhstan finance and leasing companies experienced slower growth in 2023 and H1 2024 due to a challenging macroeconomic environment. However, #Fitch believes that portfolio growth will increase and asset quality and profitability will improve as macroeconomic pressures lessen. Read report: https://ow.ly/R3Pl50TCmIE Join Fitch & AFSA in Astana on Oct. 15 to hear our NBFI analysts speak. Register: https://ow.ly/fFOe50TCmIF #FitchRatings #NBFI

𝗨𝗖𝗕 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗟𝗶𝗺𝗶𝘁𝗲𝗱 𝗥𝗶𝘀𝗲𝘀 𝗛𝗶𝗴𝗵𝗲𝗿 𝗮𝘁 𝗙𝗶𝗻𝗮𝗻𝗰𝗲𝗔𝘀𝗶𝗮 𝗔𝗰𝗵𝗶𝗲𝘃𝗲𝗺𝗲𝗻𝘁 𝗔𝘄𝗮𝗿𝗱𝘀 𝟮𝟬𝟮𝟰 After winning two International Best House Awards at the FinanceAsia Achievement Awards 2024, UCB Investment Limited (UCBIL) has further cemented its position by securing three Best Deals Awards and a Highly Commended Deal, representing South Asia (India, Sri Lanka, Pakistan, and Bangladesh). UCBIL has won 𝗕𝗲𝘀𝘁 𝗗𝗲𝗮𝗹 𝗔𝘄𝗮𝗿𝗱𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗳𝗼𝗹𝗹𝗼𝘄𝗶𝗻𝗴 𝗰𝗮𝘁𝗲𝗴𝗼𝗿𝗶𝗲𝘀: 𝟭. 𝗕𝗲𝘀𝘁 𝗜𝗣𝗢 𝟮. 𝗕𝗲𝘀𝘁 𝗜𝘀𝗹𝗮𝗺𝗶𝗰 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 𝗗𝗲𝗮𝗹 𝟯. 𝗕𝗲𝘀𝘁 𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝗘𝗾𝘂𝗶𝘁𝘆 𝗗𝗲𝗮𝗹 𝗛𝗶𝗴𝗵𝗹𝘆 𝗖𝗼𝗺𝗺𝗲𝗻𝗱𝗲𝗱: 𝟭. 𝗕𝗲𝘀𝘁 𝗦𝘆𝗻𝗱𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗟𝗼𝗮𝗻 𝗗𝗲𝗮𝗹 With global contenders such as DBS, Goldman Sachs, Citi, HSBC, and Standard Chartered, this accomplishment showcases UCBIL’s ability to make a mark in the competitive financial sector. Additionally, UCBIL was recognized as the Best Securities House in Bangladesh 2024 by Euromoney, complementing its consecutive wins for Best Investment Bank in Bangladesh by FinanceAsia and Euromoney in 2023 and 2024. We extend our gratitude to our clients, UCB PLC (our parent company) for the patronization, and the collaborative recognition of regulators and stakeholders.