Fintech Impact

Summary:

In this 90th episode of Fintech Impact, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Andrée Simon, President and CEO of FINCA Impact Finance. FINCA provides microfinance loans in developing communities across 20 countries, merging financial services with social impact. Andrée discusses the unique challenges FINCA faces in the developing economies they serve, how technology affects their business model, and why an emphasis on social impact is important to her. 

Episode Highlights: 

● 00:48: – FINCA Impact Finance operates across 20 countries, providing financial services to individuals who don’t have access to traditional banking resources. 

● 03:58: – Maintaining a sense of community encourages positive financial behaviors and gives FINCA a high rate of return and success on the loans they distribute. 

● 04:50: – Most of their over 10,000 employees are on the frontlines, interacting with clients directly in areas where traditional banks won’t invest in new branches. 

● 06:50: – They are able to make credit decisions on the spot for many clients with the aid of technology like tablets replacing analog paperwork. 

● 08:10: – FINCA’s return is lower than a purely commercial, profit-driven player because they focus on social impact. 

● 11:30: – The risk in this kind of lending comes primarily from natural disasters and other instability that these communities don’t have the support to navigate through. 

● 15:10: – We still don’t have the kind of data that would allow us to have a complete picture of a lender’s potential relationship with an individual. 

● 16:55: – FINCA is operating in economies where cash is still king, and the cost of data is really high because these communities don’t live in a digitized economy. 

● 21:30: – If Andree had one wish, it would be to know exactly which technological investments FINCA should be making. 

● 23:11: – The biggest challenge is changing people’s minds about how to operate the business. 

3 Key Points 

1. Operating as a hybrid of financial performance and social impact has allowed them to 

evolve and make changes to benefit the clients more quickly. 

2. It’s difficult to predict the shocks that can hit developing communities and affect clients’ 

abilities to pay back in the short term. 

3. It’s very difficult to know where to invest in tech because there are so many options that 

take years and a ton of money to implement. 

Tweetable Quotes: 

● “We are sitting here in this challenging space with our clients because we want to build a better boat.” –Andrée Simon 

● “Digital is great for certain things for us today, but in the absence of an ATM network and in the absence of bank branches, mobile is not the answer.” –Andrée Simon 

● “When you bring people along and you’re all running in the same direction, it’s really exciting, but you’ve got to keep on laying the rails out there and encouraging everyone to go down the path.” 

Resources Mentioned: 

● Facebook – Jason Pereira’s Facebook 

● LinkedIn – Jason Pereira’s LinkedIn 

● FintechImpact.co – Website for Fintech Impact 

● www.fincaimpact.com – FINCA Website 

● https://twitter.com/andreesimon – Andrée Simon’s Twitter