Microfinance Market Poised to Reach Over US$602.9 MN by 2025

Future looks bright for Microfinance Industry! Go aboard with Arttha’s Microfinance Software System

Microfinance is an industry that has steadily evolved from the 1970s when organizations gave it a formal institutional form. The definition of microfinance has revolved around lending small loans to the underprivileged for a long time. However, the definition has got an all-new meaning in recent years. Today, it includes many other financial services apart from just microcredit, such as payment solutions, insurance, savings accounts, etc.

The future of microfinance seems promising as it continues to expand beyond conventional institutions. The rapidly advancing fintech technologies, coupled with the rise in the number of online banks are paving the way for large scale offerings. Financial inclusion is nearing reality in even the most remote areas of the world which are currently excluded from such services. These technological advances will also bring significant structural changes in the microfinance industry soon. By 2025, the microfinance industry is anticipated to reach over US$602.9 Million, and will bring in healthy gains adding substantial momentum to the global growth.

The technological innovations aren’t just offering diverse services, such as credit, insurance, and savings products. They have also enabled affordable payment infrastructure along with other services to poor people. Such innovations in the coming years will give rise to mobile banking software and services in developing countries.

What Digitization looks like in the world of Microfinance!

The scope of digitization is vast, and every sector has come leaps and bounds. Be it the small organizations or big giants, they are all thriving with the advent of digital technology. The microfinance sector is no different and has grown and continues to expand in thought-provoking ways.

Let’s have a look at how:

Cashless Banking

Ever since digitization has entered microfinance, the aim is to promote financial inclusion. Impact-oriented microfinance institutions are finding ways to enhance their reach to the underbanked while minimizing the operating costs at the same time. This has prompted many microfinance banks to shift to cashless banking.

Intuitive Credit Scoring 

The idea of microloans would be unrealistic without any way to spot the risks involved with the potential borrower. That’s where big data has stepped in. The new face of microfinance digitization can be found in big data. It works with huge volumes of data, which, when accessed within the correct time frame, enables real-time analysis. Big data is enabling microfinance institutions and banks to look beyond the numbers and assess the creditworthiness based on other factors too.

When we say technology, there is no end. Technology and more specifically, financial technology, holds vast opportunities for the microfinance sector. Traditional methods coupled with modern digital concepts have opened doors of expansion for microfinance institutions.

The global microfinance market is predicted to witness steady growth in the years to come. This growth can be attributed to the steady rise in the number of small and medium enterprises (SMEs). Growing government initiatives to improve credit lines of people from lower-income groups is anticipated to further fuel the growth. Such vigorous efforts to provide high-quality financial services to socially marginalized people are another key driver of the microfinance industry. Improved risk management practices and increased supply chain activities of microinsurance companies are also likely to create growth opportunities soon.

The Asia Pacific microfinance sector has undergone considerable transformational change in recent times. This rampant growth can be attributed to the growing innovations in the financial sector. Such innovations are helping microfinance institutions (MFIs) boost their outreach and develop highly diverse product offerings.

Today, various microfinance institutions have started seeking microfinance software system for offering digital financial services in a highly convenient and efficient way. Arttha’s microfinance software system exhibits a multi-tenant and modular architecture that provides a cost-effective solution for digitizing the microfinance operations. Arttha’s fintech platform is based on modern practices & technology and allows rapid and flexible deployment of business services. Automate your microfinance services with Arttha’s easy-to-use microfinance software solutions. Learn how Arttha, a unified fintech platform, can help redefine your business through microfinance software solutions now!