SPECIAL REPORT: Sébastien Boyé of I&P on Microfinance Institutions Digitalizing for SMEs, Taking on “Aggressive New Actors” in Africa

At last week’s SAM conference, Sébastien Boyé, the Chief Investment Officer of Investisseurs & Partenaires, delivered a keynote address on the future of financial inclusion in Africa. Mr Boyé expressed optimism about Africa’s future because of the continent’s dynamism and entrepreneurial spirit. He cited forecasts that by 2050, 250 million new jobs will be created in Africa as the continent’s GDP overtakes that of the EU. In terms of weaknesses, there is significant volatility, and several countries are getting into trouble with too much public borrowing.

Mr Boyé argues that stakeholders in the financial inclusion sector need to focus on topics such as human resources, academic research and digitalization. When it comes to digitalization, institutions must look to improve both customer service and productivity. While many organizations have been taking on this weighty challenge to benefit microfinance clients, Mr Boyé argues that we also must find ways for digitalization to benefit small and medium-sized enterprises (SMEs).

As digitalization ripples through the industry, Mr Boyé points out that microfinance institutions (MFIs) are facing “aggressive new actors,” such as Facebook, WhatsApp and Alibaba, as well as mobile network operators and banks. Given the high costs of digitalization, Mr Boyé suggests finding ways to share these costs with partners. For MFIs to continue to make progress, they may take on alliances with some of these new actors, which may have very different workplace cultures. Consolidation is also on the horizon.

Meanwhile, the heart of MFIs’ strength is the trust relationships they have with their customers. This is something that artificial intelligence cannot replace, Mr Boyé points out. We must focus on client protection more than ever. The microfinance sector has 30 years of experience in customer protection, creating social impact and working successfully with regulators. This is a significant advantage MFIs have over the new entrants to the field.

Investisseurs & Partenaires, which has offices in France and seven African countries, is “entirely dedicated to financing and supporting small and medium-sized enterprises in Sub-Saharan Africa.

This article is part of a sponsored series on SAM (the French acronym for African Microfinance Week), a major conference dedicated to financial inclusion in Africa. SAM, took place in Ouagadougou, Burkina Faso, from October 21-25, 2019.

ADA, an NGO based in Luxembourg, co-organizes SAM every two years with the support of Luxembourg’s Ministry for Development Cooperation and Humanitarian Affairs. The SAM steering committee members are: ADA, Luxembourg’s Ministry of Foreign and European Affairs, the Microfinance African Institutions Network, the African Rural and Agricultural Credit Association, and the Fédération des Association Professionnelle des Systèmes Financiers Décentralisés de l’Union Economique et Monétaire Ouest Africaine. We invite you to learn more about SAM at http://www.sam.africa.

MicroCapital has been contracted to promote and document each SAM since 2015.

Additional Resources

SAM
http://sam.africa/

Other MicroCapital coverage of SAM and vignettes demonstrating its value to participants
http://www.microcapital.org/category/semaine-africaine-de-la-microfinance-sam/

Vignettes demonstrating the value of SAM en francais
https://www.ada-microfinance.org/fr/evenements/semaine-africaine-microfinance/objectif-sam-2019/paroles-de-nos-participants