Challenges of Innovative Financial Inclusion Examples of innovation - Revolutionizing the sector 1. Transformation of MFIs into regulated financial institutions. • This has led to:– Entry of conventional banks into the microfinance space. – Increased Competition – Introduction of many new products. – Increased access to financial services (financial inclusion) – Attraction of new capital from local financial markets and foreign sources. – Partnerships in new products – Reduction of interest rates Examples of innovation - Revolutionizing the sector • Examples of New Products • Value addition Community based enterprises, such as. – Community water projects – Leasing of small holder farmers equipment • Proliferation of investment clubs with links to microfinace, as suppliers of capital to CBEs Examples of innovation - Revolutionizing the sector 2. Mobile Banking Systems. – The famous M-Pesa made & continues to make big impression. – Current innovation: MFI/Bank mobile banking systems • Links to banking, payment systems & M-Pesa likes • Facilitating payments for goods, services & utilities • Opening access to many more customers – Over 2,000 entrepreneurs participating in the iHub • A forum (technology hub) - entrepreneurs who seek to leverage on mobile technology. • Developing solutions for MFIs/Banks & other sectors which will further open access. Examples of innovation - Revolutionizing the sector – Examples Recommendation/role for European Microfinance Platform members 1. Support Regulators to – Develop policies & regulations for mobile systems 2. Support innovation accelerator initiative – seeking to – Help stimulate a startup of technology based SMEs to provide services to masses. – Bring in Angel/seed capital – Mentorship to young entrepreneurs The Midnight Sun Group (innovation Accelerator), ihub & mlab – examples of players in this space. 3. To further deepen outreach: – – Support funds that focus on smaller & rural based MFIs Support activities that bring together investors & MFIs in Africa.