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5 customer support wins for African microfinance

5

min

Microfinance institutions in Africa scale multilingual support with Proto chatbots, and achieve 5 key customer support wins at the same time.

Microfinance institutions (MFIs) have been central to the financial inclusion initiative in Africa for decades. With lower barriers to credit and banking services, MFIs enable bottom-of-the-pyramid customers to access life-changing financing: loans that carry them through economic difficulties, funding for new businesses, and gender-inclusive financial services. Despite challenges such as high operating costs and limited access to funding, the microfinance industry in Africa continues to grow and evolve comparatively quickly.

However, high-quality customer service remains a key challenge for MFIs during this growth. Access to technology and trained staff is limited outside a handful of major cities, and high volumes of small transactions make it necessary to keep service costs low. As a result, tight budgets for customer service limit the amount of time that live support agents can spend with each customer, risking low satisfaction and inevitable manual error.

Microfinance providers serving diverse populations trust localized chatbot vendors such as Proto to automate customer service in languages such as Kinyarwanda and Twi, allowing them to serve customers at scale cost-effectively.

But budget considerations are not the only roadblock to customer satisfaction for African MFIs. Proto’s multilingual and omnichannel capabilities, case management tools, and regulatory partnerships help build trust and financial inclusion as well. Below is a closer look at some of the opportunities for African microfinance institutions that embrace such as AI Customer Experience (AICX) solution:

1. Language barriers can be a competitive advantage

Africa’s linguistic diversity is unparalleled, with over 2,000 languages and thousands of dialects across the continent. This diversity creates language barriers in multilingual markets, constraining effective customer service for African MFIs.

Many MFIs are attempting to automate customer service, but these chatbot solutions often only speak common languages like French or English, reinforcing communication barriers and colonial-era norms for underserved populations. Automating communication in local languages is a must for MFIs that want to not only reach all customers – but also stand out in a crowded industry as speaking that same language as customers.

Proto chatbots are powered by its proprietary HermesAI™ natural language processing engine, trained with specialized data for low-resourced languages acquired through Proto’s regulatory partnerships. In the case of MFIs, Proto’s service to  African central banks such as the Bank of Ghana and National Bank of Rwanda provide for unique capability in financial terminology for Twi and Kinyarwanda, respectively.

2. Limited communication channels are another advantage

Mobile penetration in Africa has reached 93%, but many of the low-income clients that could benefit the most from access to microfinance rely on feature phones rather than smartphones.  Thus, these phones support SMS only – no internet-enabled apps like WhatsApp.

MFIs that rely on smartphone apps to automate services exclude this key customer segment, leaving rural populations reliant on live support. In turn, this drives up service costs and creates longer wait times for financial services.

Proto’s integration with Africa’s Talking lets African MFIs reach underserved customers via SMS, along with 15 other channels including WhatsApp, Messenger, and webchat. The chatbots deployed via SMS are predesigned to support text-only conversations with the rich features available in messaging apps, such as carousels and images.

3. Building customer trust for digital channels creates loyalty

Digital adoption among African banks is between 20-30%, lower than the world’s other regions. An estimated 57% of Africans are still unbanked showing the significant untapped potential for microfinance in Africa, particularly through the accessible SMS channel. But behind these statistics is a reality: African customers lack trust in digital financial services.

Unbanked customers may have many questions about loans and other financial services. For this customer segment, swift answers early in the onboarding process are a crucial way to help increase confidence in these products. While digital solutions can improve access to microcredit, they need to be paired with tools that help with financial literacy and borrower decision-making.

Proto’s service to microfinance institutions like FINCA Uganda helps to automate answers to general FAQs, giving customers a reliable and no-wait financial information source that builds credibility.

The advantage of providing this education service is that customers are more likely to give their trust to a helpful brand, when they are ready to try digital financial services. By leveraging Proto’s localized chatbots, MFIs can keep this education cost contained and observe this return-on-investment over time.

4. Gender inclusivity is also about the bottom-line

Although gender equality is making progress in sub-Saharan Africa, many women still have limited access to financial services due to discrimination, lack of collateral, and self-selection bias. MFIs are playing a key role in gender inclusivity with lower barriers to credit – but fintech solutions can help make financial services more accessible and less biased, without the need for human-to-human interaction. In addition to this social good, MFIs that succeed in including women can earn loyalty from the customer segment that may command decision making for household finances – in turn reducing business risk and bolstering the bottom-line.

Proto can help MFIs reach women in Africa by improving access to the information they need to make financial decisions, including alternative evaluations of creditworthiness. Automated chat banking across digital channels such as SMS can reduce gender discrimination and unlock new customer segments for MFIs.

5. Regulator alignment on consumer protection reduces risk

In an evolving regulatory environment, African MFIs need to  stay compliant with rapid recourse expectations for unsatisfied customers, which in turn can help build a trustworthy reputation in their communities. Better KYC and credit evaluation practices can also lower loan default rates, helping MFIs stay profitable over the long term. But these mandated systems can be costly to setup and maintain, especially for small MFIs.

With partnerships with central banks in Rwanda, Ghana, and Liberia, Proto is uniquely helping improve access to financial consumer protection across more than 2,000 regulated financial institutions in Africa. In Rwanda alone, Proto chatbots have answered over 20,000 consumer protection messages across 15 different MFIs, helping these institutions achieve best practices and raise the market standard for customer service. Using Proto’s regulator-adopted technology ensures this alignment and reduces the risk of legal mandates to set up costly consumer protection systems.

How Proto chatbots can help

Microfinance in Africa has complex needs when it comes to digital solutions – crossing the last mile is difficult with rural populations, hundreds of local languages,  and low levels of financial literacy, consumer trust, and internet access. Beyond just a tool for the biggest retail banks, chatbots from innovators like Proto are closing this gap.

Oleksandra is the Head of Growth at Proto. She specialises in digital expansion strategies for emerging markets and enterprise software technology. To reach Oleksandra, please write to her at olexandra@proto.cx.