Speakers on Tuesday stressed the need for regulatory and policy supports in creating an enabling environment for digitising the country's microfinance industry.
They also called for taking necessary preparation by the microfinance institutions (MFIs) to embrace the digital transformation and increase investment for meeting the huge initial cost of digital transformation while ensuring financial and technical literacy of the clients.
According to them, still there remain some regulatory barriers to mainstream the digital financial services (DFS), including the risk of losing human touch with the clients.
The observations were made at a discussion session titled 'The Future of Microfinance in the Era of Digital Disruption: How Bangladesh Should Respond?' of Bangladesh Digital Financial Inclusion Conference 2018 held in the capital.
United Nations Capital Development Fund (UNCDF) in association of Access to Information Programme (a2i), BRAC and Business Finance for the Poor in Bangladesh (BFP-B) organised the function.
Ananya Raihan, chief executive officer of iSocial, moderated the session.
Main Uddin Ahmed, director, Microcredit Regulatory Authority (MRA), Shameeran Abed, senior director, Microfinance and Ultra Poor Graduation Programmes, BRAC, and Imran Ahmed, senior director, programmes & Initiatives, Shakti Foundation, were the panel speakers.
Speaking at the event, Main Uddin Ahmed said that the MFIs would not be able to survive without digitisation.
Terming the DFS as important for the MFIs, he said digitisation could reduce the cost of payment disbursement and cash collection.
"Limit should not be there for transaction. Money-laundering should be under close watch," said the MRA director.
Shameeran Abed said: "We are working in the MFI for 40 to 45 years manually. So the mindsets of the sector insiders are still in the manual process."
The country is yet to get ready for the digital credit system. At least two years would be needed to make this transformation, he said.
Though some transactions are being made through bKash and other services, the limit of transaction is only Tk 10,000 to 15,000 in a day as per the guideline of the Bangladesh Bank, Mr. Abed said.
Another panel speaker Imran Ahmed said that before going to initiate the full digital financial services in the MFS, it would be very essential to make the infrastructure ready first.
"We should not only think about giving loan to the poor, needy and ultra poor, but it is absolutely necessary to develop entrepreneurship among them," he said.
Ahmed also focussed on making standard policies to control maintenance of data privacy.
