The answer to this question is simple: yes! Regardless of the type of business you have, banks and other financial services providers are going to play some role in modern-day business transactions.
Microfinance is getting quite some attention nowadays for both positive and negative reasons. Some say it can be a solution to address poverty or to facilitate financial inclusion. Others opine that it creates more problems for low-income people, by serving as a debt trap. As far as investment is concerned, though, it’s fairly easy to answer the question whether or not it’s a good idea investing in a microfinance business.
No, this is not the Robin Hood you likely have in mind. This is about stock trading mobile app provider Robinhood, which is also known as a “microfinance giant”. The company has been helping individuals trade stocks through an easier and simpler platform. It has recently announced that it is joining the cryptocurrency trading bandwagon. The company was founded in 2013 and is regulated by the Financial Industry Regulatory Authority and Securities and Exchange Commission and seeks to democratize stock trading and now wants to include cryptocurrency as part of its offerings.
The Association of Microfinance Institutions in Rwanda (AMIR) is reportedly planning to adopt technology to improve services. This move is expected to address customer complaints more efficiently and reduce the challenges confronting the microfinance sector.
AMIR senior programs manager Jean Pierre Uwizeye, in a report on The New Times (English daily in Rwanda), said that they are set to make use of a grievance resolution mechanism software. This plan is intended to improve customer protection and enhance customer experience in all of Rwanda.
Big data is something that benefits more than just tech companies and research organizations. It also has implications and applications in financial inclusiveness. The collection and analysis of extensive amounts of information about consumers is something that can help foster financial inclusion as information is used by financial service providers to better assess the web of services they offer to individual customers.
Sharone Perlstein is a well-informed witness to the radical changes that microfinance and mobile technology are bringing about in the world of finance and banking. As Perlstein sees it, the smartphone is now making significant advances possible by significantly increasing the accessibility of microfinance on a global level. In his view, this whole dynamic is radically empowering ordinary people all over the world and causing the entire banking system to change in ways that will make it far more suitable for a world in which rapid communications and online access are critically important.
On a truly global level, but especially in developing regions, Microfinance is allowing creative people with limited financial means of their own to turn their business ideas into living realities. Microfinancing is therefore providing an excellent solution to the all-too-well-known problem of how someone who has an excellent idea for a business but lacks funding can act on that idea.
Sharone Perlstein on How Microfinance Is Helping Low-Income Individuals Become Successful Business Entrepreneurs
Enabling entrepreneurs to grow-out of low-income situations by helping them build their business can stimulate economic growth on a national level. However, all over the world, and especially in developing countries, there are people who have great business ideas, but no means to develop them. They are found ineligible for conventional business loans, fail to raise venture capital, and definitely do not have the money to start up independently.