FINCA International will Digitize its Village Banking Activities, Plans to Dive into Mobile Savings

Rupert Scofield - President, FINCA

FINCA International, a global microfinance leader that popularized village banking where groups of low-income entrepreneurs share and guarantee one another’s loans to drive development – launched its services in Africa more than two decades ago. Its village banking methodologies continue to grow in 6 African countries (Uganda, Tanzania, Malawi, Zambia, DRC and Nigeria) and for the past couple of years, the institution has leveraged the offerings of technology to predict credit risk of borrowers in markets that have always been traditional.

Speaking during the Financial Times (FT) Africa Payments Innovation Summit that was held on March 7 in Nairobi, Mr. Rupert Schofield, President and Co-founder, FINCA International highlighted notable growth in the African market. Also, he mentioned FINCA’s collaboration with USAID in integrating microfinance loans and entrepreneurship training for the youth, as well as selling socially responsible products to low-income persons especially in Uganda.

Asked about the corporation’s plan to bolster financial inclusion for low-income entrepreneurs, Rupert says, “There are opportunities to do so, but the process can take a long time and a lot of money. In some cases, the exercise does not translate to scaling, and this has forced some entrepreneurs to shut down their operations. It creates a lot of tension for FINCA.”

Asked about the opportunities in African markets (ranging from money transfers and loans), Mr. Rupert insisted FINCA will embrace every microfinance and technology aspects that have seen tremendous adoption in the recent past.

“We are trying to create all these ecosystems in all the countries where we have customers such as vendors, wholesalers and merchants,” he adds.

FINCA continues to offer banking services in Africa. It offers loans and money transfer services. In terms of technology offerings, the corporation has different plans for its 6 African market. Save for Uganda that has stringent approval procedures, FINCA has spurred innovative financial technology that has created digital channels for offering flexible products. For instance, its Tanzania operations employ data analytics and credit scoring platforms to ensure safe, prompt and successful borrowing.

FINCA has also launched mobile wallet services, as well as nano loans. Its primary product this year is mobile savings. To put keep these services on track, FINCA has engaged a couple of vendors to digitize the exercise.