Amartha: Fintech Beyond Finance




“In the 1990s, if you wanted to be a social entrepreneur, you founded an MFI. Today, you start a fintech.”

(Quoting this from the 2019 blogpost of Elisabeth Rhyne, the managing director of the Center for Financial Inclusion at Accion.)

The blogpost can be accessed here. It contains the overview of how things change in serving the underserved by anchoring the product deliverable to the microfinance sector. It also highlights how the microfinance sector responding to the era of digital transformation. Going forward, the article leads the discussion to the 360 view of questioning the so-called seamless transition happened in recent years, where M-Pesa was mentioned. The discussion circling around the issue of blending the method of risk assessment with the measurement of social performance. Making the industry inclusive for all the stakeholders is what creates the intersection of social entrepreneurship and the role of microfinance, through the purposive-mind of “bridging the gap”.

How does this discussion ring a bell for Amartha? As we commit to serving the unbanked in rural areas — starts from women, we identified that the gap in financial inclusion is what makes them live in impoverished areas. The right to access resources like capital funds, and unequal distribution of access to basic service, makes them categorised as “poor people”. A reflective vision after two years delivering services to the underserved segment: in fact, poor people entitled as ‘poor’ mainly because they are:

1. poorly assessed

2. poorly accessed

3. poorly served

It is not them born as poor, it is us define the untapped.

Then, how does Amartha initiate the solution for this issue?

We educate the borrowers about how to access formal financial institutions.

We help “poor” people from the predatory loan shark, by promoting productive loans and shared responsibility.

For those who are inexperienced with financial services, we provide them quick and convenient access to finance.

We implement risk-based pricing for creating an ethical, responsible, and more convenient financial services environment. 

For those who work with paper-based operations, we carefully simplify the process by adopting technology.

For those who start accepting our approach, they gave us valuable learning for our product development.

For those who perform better, we brought them to such a life-changing experience.

Wait, life-changing experience? How come? Well, on being accountable, Amartha shows the evidence through the Social Accountability Report. Read the full series here, and see how we are progressing the wellbeing of our customers — those who are trapped in the bottom of the pyramid; by starting to give them access to finance.

By far, the Amartha’s journey has accumulated milestones that confirmed the feasibility of digital transformation for traditional MFIs, and how we impacted the society at the grassroot level by ‘bridging the gap’. Learning that can be our takeaway, is how well we assess, access, and serve this underserved community with our current product and services. The next step that could take us forward, is by helping our borrowers to enter the digital ecosystem, and taking the most benefit from it.

If we meet someone who is still wandering, “Is digital transformation feasible for traditional MFIs?”; I suggest we invite them to Amartha. Let them invest themselves in one of the impactful investment platforms, taking investment beyond finance.




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