Bernd Wendeln, CCO at Natech Banking Solutions: Romania, a Pioneer in Microfinance

Natech Banking Solutions was the main sponsor of the Digital Banking Scorecard conference and report launch held on March 19, 2024, in Bucharest, Romania.

During the panel discussion on “The Digital Future of the Microfinance Sector,” Bernd Wendeln, Chief Commercial Officer at Natech Banking Solutions, shared several key insights.

This article highlights the main takeaways from his speech.

Significant Demand for Microfinancing

In his speech, Bernd Wendeln stated that there is a significant appetite for this type of financing in the region.

According to Natech’s research, the demand for microfinancing in the region is approximately one billion euros.

Challenges for Traditional Banks and NFIs

“Traditional banks are generally not interested in this segment because the risk profile for microfinance clients is entirely different and difficult to measure. In Greece, for instance, we have three clients involved in this type of financing. However, Greece, unlike pioneering Romania, approached this topic late.”

Referring to non-banking financial institutions (NFIs), Bernd mentioned that they face regulatory restrictions when covering microfinance demands. Additionally, there are constraints from performance indicators and stakeholders, which operate differently.

Despite this, the biggest challenge in this segment is risk management because the target audience is different.

Digital Solutions and Hybrid Models

From a digital solutions provider’s perspective, Bernd said that a different approach is needed in this field because the services and products offered must be built within a balanced ecosystem, mixing online and offline elements.

30% of Romania’s population does not have a bank account, thus the ecosystem must differ from that of banks, with options adapted to users not accustomed to technology.

Natech has developed digital solutions to meet the needs of financial institutions offering microfinance, proposing a suitable approach for their clients.

Conclusions

“We’re talking about this hybrid model, online and offline. Clients seeking microfinance come from very different fields, such as agriculture, small traders, and small producers. For them, it is crucial to first understand the market and their needs. Then, we can provide solutions that help them.”

Source and Acknowledgements

This article was originally published in Romanian on FutureBanking.ro on April 5th, 2024.

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