'Microfinance in the Cloud’ conference

Published on 31 August 2016

Microfinance in the Cloud conference

More than 380 participants attended the Microfinance in the Cloud conference from over 40 countries in Europe and Central Asia. This international audience was able to benefit from fi-compass expertise provided through the EU Programme for Employment and Social Innovation Technical Assistance (EaSI TA).

A fi-compass EaSI TA Thematic Seminar on Mutual Learning raised awareness about the topic of credit scoring in microfinance. This was followed by a dedicated fi-compass EaSI TA workshop later on during the two-day conference about alternative financing models for micro, small and medium enterprises (MSMEs) in the EU.

The Thematic Seminar on Mutual Learning looked specifically into methods for assessing the credit worthiness (credit score) of potential customers. Some 38 participants from 28 different microfinance institutions (MFIs) and 19 different countries participated, leading to a very lively exchange and discussion. Toma Radu, Deputy General Manager from VITAS participated in the EaSI TA seminar and observed that “credit scoring is a very interesting and relevant topic for the microfinance context, since it gives the opportunity to control the risk and decrease the operational expenses.” 

The fi-compass EaSI TA workshop on 24 june was held at a time when alternative business models have become increasingly popular, creating opportunities and challenges for the traditional microfinance sector. New financing models include those that are emerging online and offering alternative funding streams for MSMEs. These microcredit novelties complement current market offers for MSMEs, while their differences are helping to open up new ideas and drive innovation among MFIs.

Options for alternative funding opportunities, client sourcing and marketing positioning were all examined during this fi-compass EaSI TA event. Discussion centred around the ‘buy’ versus ‘build’ options for MFIs, emphasising that technology is evolving fast and innovations become obsolete quickly. This poses a challenge for MFIs, especially smaller ones that may not be able to invest enough and grow fast enough to become a leader in a particular technology solution or business model. Since new technologies are attractive and fashionable, there is growing competition among microcredit providers in the market. However, there is still scope for more traditional credit providers.

Andreas de Foreslier, Member of the Board of Smart Credit, participated in the event and he noted that alternative financing models are “a fascinating view in the future - frightening and at the same time comforting.”

See the MFC conference website for further information about these EaSI TA sessions and the event’s other different plenary and workshop sessions.