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

Abstract

European microfinance suffers from a visibility deficit. It is rarely mentioned in the media. Our research question is ‘Why does European microfinance suffer from a lack of visibility in the press?’ This study looked at news reports and press releases over a 18-month period (2016–2018) to check if European microfinance and its innovations were in the news. 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 (MFIs). Second, the innovations that are talked about in microfinance are taking place in developing countries out of Europe. The study followed this up by examining websites of some of the leading European fintech firms to see what they were doing that made them so visible. We share some best practices in the use of digital technologies by highly innovative fintech firms in areas that could be of use to MFIs in diverse sectors such as mobile payments, credit scoring, card readers, ATMs and management information systems. To become visible, European microfinance may need to demonstrate that it is doing new things and that it is using innovative technologies that helps it reduce costs, increase outreach and, thus, have an impact. Forii such as the European Microfinance Network and the European Microfinance Platform need to promote these innovations by offering appropriate awards. Finally, collaborating with training and educational institutes may help add to visibility.