| | January 20218very important development happened on April 18, 2019 when RBI issued draft guidelines for public comments proposing Regulatory Sandbox (RS) to catalyse innovations by FinTech firms. In a way, it signified the recognition of the disruption technology is bringing in the space of financial services industry, just like any other sphere of life. The draft guideline states, "Areas that can potentially get a thrust from the RS include microfinance, innovative small savings and micro-insurance products, remittances, mobile banking and other digital payments."Microfinance industry has witnessed rapid evolution of technology in use, over the last few years. A decade ago, high quality operations and internal controls were riding completely on paper-based, cash-based mechanism and the use of technology was limited to a basic loan management system and MIS. It was considered only appropriate that services for poor and underprivileged were running on antiquated methods. However, subsequent years witnessed rapid change in the landscape with technology enabling almost all the functions within the domain of microfinance. Today, operations in most NBFC-MFIs are characterised by digital origination of loan applications through mobility devices like Tablets/ Smartphones, internet connectivity to run automated processes like e-KYC, Credit Bureau, internal credit rules, validity of bank accounts etc., digitally capturing important customer protection steps like household verification, trainings, group approval by senior officers and loan utilisations, automated creation of loan accounts, availability of repayment schedules/ demands on mobility devices and automated accounting of repayments made by customers. In addition to operations, other functions like Internal Audit, HR, Risk Management etc. also rely heavily on the usage of technology in most of the leading NBFC-MFIs.Going forward, some key agenda for technology emerging in this industry are ­ a) differential pricing of services basis credit-risk profile of borrowers; b) much wider product range catering to personalised requirements; c) improved client protection regime d) high customer IN MY OPINIONFUTURE OF IT IN MICROFINANCEBy Arvind Murarka, Head-IT and Neeraj Kumar Lal, Head - Strategic Initiatives at Arohan Financial Services LimitedArohan Financial Services Limited (Arohan) is one of the largest NBFC-MFIs governed and regulated by the Reserve Bank of India. Headquartered in Kolkata, the organization offers a range of financial services which includes low ticket size credit products.AMicrofinance industry has witnessed rapid evolution of technology in use, over the last few yearsArvind Murarka,Head-IT
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