News and Trends in Fintech and Digital Microfinance: Why Are European MFIs Invisible?

18 Pages Posted: 5 Sep 2018

See all articles by Arvind Ashta

Arvind Ashta

CEREN EA 7477 Burgundy School of Business - Université Bourgogne Franche-Comté

Date Written: July 26, 2018


Microfinance is one of the most famous social innovations as well as an example of reverse innovation, that is, an innovation that starts in the developing world and later spreads into the developed world. Indeed, in Europe it is being promulgated with the help of networks such as the European Microfinance Network and the European Microfinance Platform. However, European Microfinance suffers from a visibility deficit. It is rarely mentioned in the media. Our research question is why European Microfinance suffers from a lack of visibility in the press?

One could conjecture that the media likes to break news. Therefore, to become visible, European microfinance may need to demonstrate that it is doing new things and that it is using innovative technologies that help it reduce costs, increase outreach and thus have an impact.

This study looked at news reports and press releases to check if European microfinance and its innovations were in the news. It also looked at the latest FINDEX report and the websites of some of the leading European Fintech Firms.

The study finds that indeed, there are a lot of new innovations in finance. But, first, in Europe, the highly talked about fintech innovations are taking place outside of microfinance institutions. Second, the innovations that are talked about in microfinance are taking place in developing countries out of Europe.

More specifically, we find that in Europe, there are a lot of innovations taking place within the financial sphere by Fintech firms. Therefore, this study shares some best practices in the use of digital technologies by highly innovative fintech firms in areas that could be of use to MFIs. These firms have been especially present in providing mobile payments, credit scoring, card readers, ATMs and Management Information Systems.

Out of Europe, the Findex report for 2017 indicates that Digital Technology is still very under-utilized in most part of the world, other than Sub-Saharan Africa. Nevertheless, our press review indicates that media is talking about the growth of digital technologies and ATMs in microfinance in developing countries. These are being promoted by awards/prizes for Fintech. These technologies are actively backed by large MFI networks such as FINCA. The sector is witnessing alliances as well as takeovers between the financial service provider and the telecom operator.

The work is important because of its recent nature and because it summarizes the best practices that are being used by highly innovative firms. It will be useful to European MFIs who are looking for ideas on how to use technology for microfinance, improve their visibility to attract funding and to improve their impact through cost reduction and outreach increase.

Keywords: Fintech, Digital, Microfinance, Financial Inclusion, Credit Scoring, Crowdfunding

JEL Classification: O1, 03

Suggested Citation

Ashta, Arvind, News and Trends in Fintech and Digital Microfinance: Why Are European MFIs Invisible? (July 26, 2018). Available at SSRN: or

Arvind Ashta (Contact Author)

CEREN EA 7477 Burgundy School of Business - Université Bourgogne Franche-Comté ( email )

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21000 Dijon

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