The recent growth in IT and telecom amid Covid-19 lockdowns and social distancing has benefitted the microfinance sector not only in terms of improvements in loan disbursements but also in the opening of new venues for earnings.
The main challenge for the microfinance sector was to maintain the vast distribution system, making small loans costlier, but the outreach of telephony and internet services to unserved and under-served areas in the recent past helped resolve this problem.
The technological inclusivity has already promoted digital banking in the recent past but the significant importance related to financial transactions has been gained by JazzCash and Easypaisa, and even previous microfinance banks such as Khushaali and First Microfinance Bank have now set up small digital units to facilitate clients as well as reduce the cost of processing loans and collecting instalments.
Citizens and small business owner in rural areas are drifting from a cash economy towards a digital mod
