Innovations in Group Lending: Increasing Access to Credit while Maintaining a Cohesive Community Structure

Fiw Topics

MSEs
Women's Financial Inclusion

FIW Year

2024

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Summary + Key Findings

Innovations in group lending focus on enhancing access to credit for low-income individuals while preserving community structures.

🌐 Transformative Potential: The shift towards innovative financial services can significantly improve access for underserved populations, particularly in remote areas. This transformation is essential for sustainable economic growth.

🤝 Collaboration Over Competition: Partnerships between fintech and traditional banks can leverage strengths, providing a wider range of services to underserved customers. This collaboration fosters a more inclusive financial ecosystem.

📊 Data-Driven Insights: Utilizing alternative data for credit scoring helps institutions craft personalized financial products. This approach mitigates risks while serving diverse customer needs effectively.

💻 Technology as an Enabler: Digital solutions can streamline processes and enhance customer experiences, but care must be taken to ensure that technology doesn’t widen the digital divide, especially in rural areas.

👩‍💼 Focus on Women Entrepreneurs: Empowering women in microbusinesses is crucial for financial inclusion. Tailored services that address their specific challenges lead to better economic outcomes for families and communities.

🏦 Regulatory Support: A favorable regulatory environment encourages innovation while ensuring consumer protection. Continuous dialogue with regulators is vital for sustainable growth in the fintech space.

📈 Future of Group Lending: Evolving from a rigid model to a more flexible and customer-centric approach can rejuvenate group lending practices, allowing for better adaptation to changing market needs.

This session summary was AI-generated using NoteGPT.

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Indonesia’s micro and small enterprises (MSEs), primarily owned by women, have limited access to credit creating a large financing gap and hindering business growth. Microfinance institutions have been crucial in addressing this gap through group lending. However, traditional group lending models have limitations, such as templated solutions and group liability enforcement issues.

This session aims to identify innovative solutions to evolve group lending models and make credit more accessible, affordable, and convenient for women-owned MSEs. We will discuss what has and hasn’t worked with digitizing group lending models, zooming into the core underlying issues that can lead to many of these models weakening over time especially as they try to keep up with digital proliferation. The focus is on using individual data to predict risk profiles, maintaining group dynamics while catering to individual needs, leveraging technology for a seamless customer experience, and scaling the model for wider reach. By addressing these challenges, women-led MSEs can become more financially capable and graduate to larger financial institutions.

Session Speakers

Gayatri Mehta

Director, Digital Products, Accion Advisory

Gayatri is a Director, Digital Products, Accion Advisory, based in Barcelona. She provides a range of technical advisory services including digital strategy and product development. She has 10+ years of experience in financial services and technology for public, private, and nonprofit sectors around the world, including the US, South America, East Africa, Southeast Asia, and Europe. Prior to Accion, Gayatri consulted with the European Investment Fund to understand the financial technology ecosystem and strategize investment opportunities to drive financial inclusion. In Indonesia, she worked closely with a P2P fintech focused on lending to women-led microbusinesses where she led customer insights research and designed needs-based programs. She has also worked with digital P2P lending nonprofits in Kenya and managed valuations for tech and life science startups at Silicon Valley Bank. Gayatri holds a Master of Public Administration at the London School of Economics (LSE) and a B.A. in Economics from the University of California San Diego.

Aria Widyanto

President Director and Chief Risk and Sustainability Officer, Amartha

Aria Widyanto is the President Director and Chief Risk and Sustainability Officer at Amartha, a fintech startup dedicated to empowering women micro-entrepreneurs in rural Indonesia through affordable financial services and mentorship. Under his leadership, Amartha has disbursed over US$1.3 billion in working capital to 2.5 million women across 72,000 villages. Aria also advocates for women’s empowerment as part of G20 EMPOWER, representing Indonesia’s private sector. Before joining Amartha, Aria worked at MUFG Bank and Citibank NA. His contributions to financial inclusion and rural finance earned him the YSEALI Fellowship from President Obama in 2015, as well as the U.S. State Department’s International Alumni Impact Award and Australia’s Frontier Innovators Award. Aria holds a Bachelor’s degree from Gadjah Mada University, a Master’s degree in Sustainable Development from SOAS University of London, and is currently pursuing a Ph.D. in international and rural development at the University of Reading.

Roma Vasudevan

Senior Director, Risk Management & Digital Lending, Accion Advisory

As part of Accion Advisory, Roma Vasudevan is Senior Director, Risk Management and Digital Lending, based in Mumbai, India. In this role, Roma leads the transformation of financial services, driving sustainable growth for our clients and enabling Accion’s work to ensure people have the financial tools needed to improve their lives. Roma started her career at ICICI Bank working in various roles related to product, policy, and analytics within the Rural Micro-banking and Agri Business vertical. She has over 18 years of credit & risk management, product management, and analytics experience across a variety of institutions. Most recently, she worked as an independent consultant with Accion and Lokyata, supporting product and business development. Prior to Lokyata, a Washington, D.C., based fintech startup, Roma also worked at Accion in advisory services supporting both investee companies and other partner institutions as a credit and risk specialist. Roma has a bachelor’s degree in Statistics from the University of Mumbai.

Amam Sukriyanto

Director of Commercial Small & Medium Businesses, BRI

Amam Sukriyanto is an experienced banker currently serving as Director of Commercial Small & Medium Businesses at BRI, one of the largest state-owned banks in Indonesia. Prior to this role, Amam held several management positions at BRI, within the bank’s oil, gas, and energy business, international business division, corporate secretary division, and most recently in fixed assets management and procurement. He also spent time as General Manager of BRI’s New York Agency. Amam holds a Bachelor of Engineering in agricultural engineering from Brawijaya University in Malang, East Java, and an MBA from the University of Adelaide, South Australia.

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