22
Mar

Empowering Entrepreneurs: Microfinance’s Role in African Development

In many developing countries, Small and Medium Sized Enterprises (SMEs) make up the greater percentage of the businesses, and employ most of the people in the economy; this results in a substantial contribution by SMEs to the GDP of the country. However, there remains a challenge, where many of these SMEs may be unable to access financial services given the nature and level of growth of their business, and the resources necessary to scale may not be readily available from corporate commercial banks.

The concept of Banking and access to financial services is very important to business growth hence SME entrepreneurs rely on their Microfinance Institutions (MFIs) to offer services that can promote and support their businesses. The ADBanking Core Banking System developed by ADFinance takes these factors into consideration and integrated tools that directly support the work of entrepreneurs by allowing them to access their banking services through Mobile Banking and Internet Banking Modules.

Considering the impact that microfinance institutions have on businesses, they eventually penetrate the market to the extent that the poor and socially marginalized people and households in society are able to have access to affordable, high-quality financial products and services that include credit, loans, and fund transfers. This not only creates improved standards of living for the communities in which the MFIs operate but also creates an opportunity to have more people venture into small-scale income-generating activities that contribute to the development of the economy.

Offering microfinance services to these groups of people does not in any way justify poor service delivery simply because the entrepreneurs cannot access commercial local, regional, or international banking services; the poor communities that rely on microfinance do deserve quality and innovation so as to boost development further, not only at the local level but also nationally. Using the Mobile Banking solutions offered within the ADBanking Core Banking System, customers of microfinance institutions are able to interact with their accounts and perform transactions directly from their mobile devices, this not only offers flexibility at a personal level but also facilitates the business communities to have access to their financial resources whenever needed.