SPECIAL REPORT: Innovations in Fintech, Human Resources Development at SAM (Semaine Africaine de la Microfinance)

At SAM Conference 2017, Addis Ababa, Ethiopia the SAM (Semaine Africaine de la Microfinance) conference in Addis Ababa, a wide variety of vendors presented their wares. Among these were several core banking system providers. Antonio Separovic of Oradian previously had set the stage for the conversation at the fintech (financial technology) session organized by Dutch development bank FMO. He argued that microfinance institutions (MFIs) shouldn’t start by thinking about whether to buy a new system, but about where the MFI wants to go and how to get there. “Fintech may be able to reduce the friction to do these things,” he said.

Cameron Goldie-Scot of Musoni agreed: “It’s about what are the challenges in your organization? Is it too expensive to handle cash in rural areas? Do you have trouble getting data from branches?”

At the earlier fintech session, Martijn Van Rooij of Above and Beyond had described his firm’s 4wrd platform, which connects MFIs with a menu of 72 fintechs, whose services can be tested offline before roll out.

Mohamed Asri of HPS later explained how his firm’s PowerCARD product can be implemented in three months on a pay-as-you-go basis. Its features include managing client transactions, internal financials, services provided via agents, Shariah-compliant products, field staff using mobile devices, and third-party services such as insurance. One of PowerCARD’s unique features is a process for determining employee bonuses, which can be tricky for management to set since they may benefit personally from the calculations.

Regarding poor internet connectivity, Debbie Watkins of Fern Software said, “We offer three data configurations: cloud-based, centralized at your head office or distributed to each branch.” She said MFIs can switch among the three modes simply as connectivity improves, and that the system includes an offline mode as well.

In closing, Mr Goldie-Scot pointed out that “Musoni was an MFI, and we went through the problems with fraud, human resources and everything. We made our technology based on what we learned.” Regarding criteria for success, Ragunandhan Kumar of Bank-Genie said, “We should not sail the ship where the wind blows. What is the really important thing that needs to be implemented?” Mr Separovic argued that the leadership of the MFI must be motivated to bring in new technology, “if the transition is lead by the tech department, that is a non-starter.”

MOBILE MONEY

Thierry Artaud of the Moss ICT Consultancy described the M-birr service, which partners with six MFIs in Ethiopia, allowing users to send money to retailers and individuals as well as receive loan disbursements and government benefits. Users can earn approximately 7 percent interest on money they store in the system, and agents and MFIs receive a portion of the fees collected on a daily basis. The software underlying M-birr is available for licensing to organizations in other countries.

SECURITY

On the topic of security issues, Niladri Roy of Craft Silicon explained his organization’s work on facial recognition processes, but he warned that “most of the places we see fraud are among employees.” Jean-Louis Perrier of Suricate Solutions warned that some institutions are at risk of failing due to cybersecurity problems. His organization is working to create a cybersecurity resource center for financial institutions in Senegal, with plans to expand to West and Central Africa.

EDUCATION

Claire Bourdon of the Frankfurt School of Finance and Management explained her organization’s consulting, live training and online training offerings, which are available in French, English, Spanish and Russian. The courses, which are an accredited part of master’s degree programs, focus on practical issues because the teachers also perform consulting for MFIs. For online courses, much of the content can be printed for offline use in case of poor connectivity.

Ignacio Olafa of nonprofit Boulder Microfinance described his organization’s three-week programs, which are available in three languages, covering management, development, digital financial services risk and policy risk. The trainings, for which enrollees must travel, are intended to challenge attendees’ views to help them improve the ways they serve clients. He stated that enrollees “leave with solutions, often that they found from working with their peers.”

Paul Kriews of the Savings Banks Foundation for International Cooperation described his firm’s offerings, all of which are performed at the location chosen by the client. Topics can include retail banking, microfinance, human resources, small and medium-sized enterprise, green finance, and others. The curriculum uses many games, and can be delivered to staff for their own use or to train them as trainers.

Thomas Roy Sinclair of Gateway Academy explained that his organization is new and looking for financial services providers in seven African countries to test its services in 2017 and early 2018. Rather than creating its own training content, the organization is working with providers such as Accion, Helix, CGAP and the Strathmore Group to help them move their in-person curricula online. The service includes an app that allows content to be downloaded for offline use.

Most of Gateway’s offerings will incur a fee, but not all. Ms Bourdon seemed to strike a chord with the group when she stated that with “free classes sometimes people aren’t motivated. My experience is when people pay, they are more disciplined and complete the course more often.” Mr Sinclair argued that MFI leaders should “think about a learning culture in their organization” and “how can you make an impact in your organization” based on what you take from a training.

Both Mr Kumar’s and Ms Watkins’ firms were finalists for the EUR 10,000 (USD 12,000) Fintech for Microfinance prize given by FMO. The prize was won by Harvesting for its work supporting agriculture through the use of satellite data.

This feature is part of a sponsored series on the third SAM, which ran from October 9 to October 13 in Addis Ababa. It was organized by ADA, an NGO based in Luxembourg, with the support of Luxembourg’s Ministry for Development Cooperation and Humanitarian Affairs, in partnership with Microfinance African Institutions Network (MAIN), African Rural and Agricultural Credit Association (AFRACA), African Microfinance Transparency (AMT), the Association of Ethiopian Microfinance Institutions (AEMFI) and Kenya’s Association for Micro-finance Institutions. MicroCapital was engaged to report on-site from the event.

Sources and Additional Resources

2017 SAM Conference
http://www.microfinance-africa.org/en/SAM

Coverage of the 2017 SAM in Addis Ababa and the 2015 SAM in Dakar by MicroCapital
https://www.microcapital.org/category/semaine-africaine-de-la-microfinance-sam/