The future of microfinance organizations

With its historical roots entrenched in the 1970’s, the concept of microfinance has taken over the world through its widespread conceptual tentacles. Despite its short historical record, its significance defined by the efforts of pioneers such as Mohammad Yunus and Akhtar Hameed Khan and large number of many other figures has helped financially enhance over 2.5 billion of the world’s unbanked population and motivate the movement for poverty elimination.

Since its start, the microfinance industry has come a long way and is now considered a wholesome industry with its own unique features. Hundreds of various established microfinance institutions work as one towards the achievement of its established short term and long term goals. Micro-Money is one such institution. It is a legally established, internationally recognized, microfinance institution which provides short term loans to both SMEs and individual figures.As the industry continues to undergo various changes, new technical advancements within the industry such as the introductions of mobile apps and software’s has paved the path for a digitalized era within which the industry has the potential to reach its ideal heights. It has granted microfinance the ability to penetrate across a diverse range of communities as to its enables alternative ways of reach and service providence which goes beyond the realm of traditional microfinance.

In the recent years, a new technology has occupied the attention of many within the microfinance industry. It is none other than the talk of the town! The fourth industrial revolution: the ‘block-chain’. The block chain is a technical platform introduced by Satoshi Nakamoto, whose identity is yet to be known. It is quite the stir because it is about to bring a globalized digital change as fiat currencies cease to exist with the introduction of digital currencies such as the bitcoin and ethereum. There will no longer be a need for banks and anonymity as the decentralized infrastructure of the blockchain would eliminate the middleman and guarantee transparency. With the adaptation of the blockchain, micro finance institutes are granted an ideal platform to upgrade their overall corporate approach and values while enhancing the entire microfinance industry as a whole. Equivalent to all the added benefits, the block chain also enables growth, limits corruption due to its transparency feature, provides diligent KYC regulations, and lowers transaction costs due to the elimination of the middle man and many more. Another benefit of the blockchain to the microfinance industry is that institutes could raise funds through ICO projects which could be used for loan purposes later on. Micromoney is a good example for a microfinance institute who has successfully adopted the block chain. The company has sharpened the business to become a decentralized open source credit & big bureau on the blockchain.

However, as the blockchain represents digital financial identity micro finance institutes continue to expand its territories and spread its wings as wide as possible while enhancing the entire human society along it.