microSTARS initiative present at the 20th annual MFC conference "Horizon 2037: Fair Finance for All" #MFC2017
The microSTARS initiative was present at the 20th annual MFC conference, that was entitled "Horizon 2037: Fair Finance for All" and organized by the Microfinance Centre (MFC) from 24th to 26th of May, 2017, in Sarajevo, Bosnia and Herzegovina. In celebration of the 20th anniversary of the founding of the first MFIs in Bosnia, which is said to be the most dynamic country in the field of European microcredit, MFC organized this year's conference in Sarajevo, and hosted a unique conference program featuring renowned thinkers, experts and special guests that were involved with setting up the sector in the 1990s.
Among other things, issues that have been discussed, were related to technology issues and how this disrupts traditional banking and the foundations of our current social structures, the consequences of the digital revolution and how microfinance institutions can promote digitally their services in an effective way, the role of socially oriented microfinance, and many more that laid the grounds for the future steps of professionals in the microcredit sector. microSTARS was represented by Mr. Neoklis Stamkos, Chief Financial Officer and Head of Microcredit Department at the Business and Cultural Development Centre (KEPA), who took part into two thematic workshops of this conference.
The first workshop was titled "New markets and market segments for microfinance: frontier countries and the EU" and addressed the particularly high demand for microcredit services in many countries that cannot yet meet this need, despite that microfinance stands for more than two decades worldwide. Speakers of this panel focused on the different opportunities and approaches to address the "gap" in countries such as France, Greece, Kyrgyzstan, and Russia.
The second workshop, "Understanding What It Takes for an MFI to Go Digital", confirmed the current trends of the digital revolution and focused on the benefits a micro-credit institution may have from adopting new digital technologies, enabling MFIs to become more efficient, reduce operating costs and serve their clients better. However, to get the real benefits of digital technology, MFIs need to understand how to create and implement an effective digital strategy. Speakers of this panel shared with the participants, their experience of their own transition to the digital era, in countries such as Croatia, Romania, Bulgaria, Greece, and the United States, having highlighted that digitalisation is a huge opportunity that MFIs need to embrace to scale up and future-proof their business. However, without full understanding and proper preparation, digitalisation can be a risk that most MFIs cannot afford to have.
This workshop aimed to create an understanding of the common challenges MFIs face before and during digitalisation and to give best practice recommendations to enable MFIs to overcome them. The workshop started by posing a key question to the audience through an online voting system (sli.do) and showing the results live on screen. The participants could choose multiple answers. Out of the 50 participants, 11 people from different parts of the microfinance industry connected to the website to answer. According to the audience, the main obstacles are budget constraints and a lack of understanding of the digital ecosystem.
Being more precise, Mr. Neoklis Stamkos shared how he struggled to find the right experts who could explain the digital ecosystem in a simple manner. Without a full understanding of the options, it has been difficult to develop a plan for digitalisation that suits his business. Neoklis, also shared the challenges he faced after digitalisation: change management with his clients. He needed to choose an e-learning tool for his clients. There were many options and when he finally decided to go for one, he had to work on clients’ adoption through internal marketing campaigns to make sure his clients would use the news tool they now had access to. To conclude with, key points and wrap ups of these panel discussions, refer to IT strategy, becoming a pillar of business strategy. In fact, for digitalisation to be most effective, it needs to be aligned with the overarching business strategy.
Digital transformation will impact the whole of your business, so start with making sure there is enough commitment from the top management for the digital transformation to happen smoothly. Building a strategy can’t happen without the buy-in of the top management and the board:
• MFIs must think big. Technology can breathe new life into your business and change its trajectory. It is your opportunity to save time and money, make better decisions and ultimately grow your business. This doesn’t mean throwing caution to the wind and just going for it. You need an integrated implementation strategy that considers all the challenges.
• Make technology part of your business strategy. In many cases, the right starting point is not the development of an IT strategy to reflect your business strategy. The most successful MFIs embed technology as a main pillar of the business strategy.
• Choose the right partner. Best practice with local support and a product that works for you is out there. A good partner understands best practice, has experience in the MFI industry and truly believes in your business. Without the right partner, you can create additional risks for your MFI and increase the challenges of digitalisation. Technology isn’t just about technology.
• Never agree to anything that you don’t understand 100%. Get knowledge from expert institutions, your tech provider and your peers....”