The role of artificial intelligence (AI) in integrating the ecological and social transition (EST) within microfinance institutions (MFIS)
In a global context marked by growing environmental and social challenges, African microfinance stands at a strategic crossroads. Microfinance Institutions (MFIs) affiliated with MAIN (Microfinance African Institutions Network) play a crucial role in advancing the Ecological and Social Transition (EST). This necessitates a shift in the core values and beliefs dominating the microfinance sector, as well as an evolution in practices. Artificial Intelligence (AI) has emerged as a powerful lever to accelerate this transformation, enhancing the impact of MFIs while aligning with the demands of sustainable development. AI addresses some of the most urgent environmental challenges, including climate modeling, ecosystem and resource management, and optimizing energy consumption.
AI as a Catalyst for Integrating EST
Integrating the EST into the practices of MFIs requires an innovative and structured approach. AI provides tools capable of analyzing vast volumes of data, identifying trends, and proposing solutions tailored to the specific needs of vulnerable populations. For example, machine learning algorithms can help assess environmental risks linked to funded projects while identifying investment opportunities in sustainable activities.
Moreover, AI can optimize internal processes at MFIs by automating time-consuming administrative tasks, allowing teams to focus on high-value missions. This includes designing green financial products, guiding clients toward eco-responsible practices, and measuring the social and environmental impact of funded activities.
Concrete Applications for MAIN Network Members
For MFIs within MAIN, adopting AI represents a unique opportunity to position themselves as pioneers of the EST in Africa. Here are some practical applications:
- Predictive Analysis: Use AI to anticipate client needs for sustainable financing, targeting climate-resilient agricultural projects or circular economy initiatives.
- Risk Management: Integrate AI models to assess environmental and social risks in loan portfolios, aligning practices with responsible finance principles.
- Awareness and Education: Develop AI-powered digital platforms to educate clients on EST issues and support their transition to sustainable economic models.
- Impact Measurement: Implement AI tools to collect, analyze, and visualize data on the social and environmental impact of funded activities, improving transparency and accountability.
A Collective Commitment for the Future
As a catalyst for innovation in microfinance, MAIN plays a key role in facilitating AI adoption among its members. This involves forging strategic partnerships with tech stakeholders, organizing dedicated training programs, and sharing best practices among MFIs.
By integrating AI into their strategies, MAIN-member MFIs can not only enhance their competitiveness but also contribute significantly to achieving the Sustainable Development Goals (SDGs) in Africa. The convergence of microfinance, AI, and the Ecological and Social Transition represents an historic opportunity to build a more inclusive and sustainable future.
Artificial intelligence is not an end in itself but a powerful means to accelerate the shift toward economic models that are more environmentally respectful and socially equitable. AI can deliver significant social, economic, and environmental benefits, serving as a critical supporter in achieving sustainable development and biodiversity protection goals.
For MAIN MFIs, adopting these innovative technologies is essential to amplifying their impact and addressing the 21st-century challenges.
Together, let’s seize this opportunity to make African microfinance a cornerstone of the Ecological and Social Transition.
What changed for the 70,000 women who took our financial literacy course?
On a hot, sunny day in Turiani, eastern Tanzania, Angelina, Jennifer, and 20 other Maasai women (an African nomadic tribe) proudly lead us through their village to show us 11 goats grazing in a field. Three months ago, they owned no livestock and relied solely on small-scale trading for income. Today, after twelve months, they own 35 goats, which they can sell for a reasonable profit. What changed? They decided to start a business together after completing a financial literacy course.
Financial Literacy: The Missing Link in Women’s Financial Inclusion
If you want a decent income, it’s better not to be a woman. The barriers they face are immense. Not only do women have less access than men to formal credit, property, and mobile phones, but research also shows they have lower levels of financial literacy—a key indicator of financial inclusion.
Yet, in least-developed and developing countries, women micro-entrepreneurs drive economic activity. In Africa, women often serve as primary breadwinners despite poverty and lack of formal education.
BRAC, which has worked closely with African women for over a decade, has always prioritized listening to and learning directly from its clients. It evaluates whether its services have a measurable impact on their lives and explores ways to further strengthen women’s financial resilience. When we ask our clients what they need, their answer is clear: Teach us how to manage our money better.
Security crisis in eastern DRC: microfinance institutions facing an unsustainable reality
The provinces of North and South Kivu in the Democratic Republic of Congo (DRC), plagued by armed group occupation, are enduring an unprecedented humanitarian and economic crisis. Microfinance Institutions (MFIs), a financial pillar for vulnerable communities, are bearing the full impact of this instability. This article, based on direct testimonies and on-the-ground analysis, highlights the challenges faced by these key players and calls for collective mobilization to support their resilience and ensure the continuity of their services.
It is in this context that, since January 2025, major cities in Kivu, vital economic hubs, have been paralyzed by forced bank closures, systematic looting, and mass population displacement. The growing insecurity has forced banks and MFIs to suspend their operations. The shutdown of certain financial institutions has deprived MFIs of essential liquidity and further isolated rural populations, intensifying their economic vulnerability.
Violence and general fear have led to a drastic slowdown in economic activity, severely reducing financial flows in fragile communities. This situation weakens the financial stability of MFIs and, by extension, the entire network of small entrepreneurs who rely on them.
The effects on MFIs in these provinces are immense. They are suffering heavy financial losses due to insecurity. Looting and population displacement have caused a dramatic spike in unpaid loans, amounting to millions of dollars in losses. Recovery rates have collapsed, as many clients have lost their businesses or been forced to flee, making fund recovery nearly impossible. Additionally, a liquidity crisis has emerged: massive Mobile Money withdrawals far exceed deposits, reflecting growing distrust in the financial system.
Insecurity also affects MFI staff. Loan officers have been assaulted in their homes, while managers have faced attacks and looting. In response, some institutions have evacuated employees to safer areas, while others have shifted to remote work to minimize risks. However, these measures limit operational efficiency and complicate service continuity. MFIs must juggle staff safety and maintaining operations—a balance increasingly difficult to strike.
MFI clients, particularly women entrepreneurs, are severely impacted. Many have seen their businesses destroyed, plunging them into deeper financial insecurity. Numerous clients are defaulting on loans not out of unwillingness but due to the extreme conditions they face. Some have disappeared, lost their lives, or fled to other cities or countries, leaving behind unrecoverable debts—a further blow to the institutions.
To sustain operations within the crisis, MFIs have implemented adaptive strategies. Secure service points have been set up in protected areas, with reduced hours to limit exposure to risks. Digitization of services is accelerating to promote Mobile Money usage and ensure transaction continuity without physical access to branches.
Staff protection measures have also been introduced, including remote work for employees in high-risk zones, early leave, and enhanced safety protocols. However, these solutions remain limited without increased external support. Thus, urgent appeals are being made to the international community for financial guarantees and emergency funds to refinance affected clients and bolster local economic recovery.
The crisis in Kivu has severe local economic repercussions. The lack of access to credit is pushing uncountable families and small entrepreneurs into deeper precarity. Doubt in the financial system, reflected in mass withdrawals, further jeopardizes MFI viability. Without swift and effective intervention, many of these institutions risk collapse, depriving thousands of families of essential financial services and undermining local economic development efforts.
Addressing this crisis demands urgent action. Partners and support institutions have a critical role to play. To avert sector-wide collapse, mobilizing emergency funds to recapitalize MFIs and sustain essential services is crucial. Strengthened collaboration with donors and international institutions is needed to secure credit portfolio guarantees and ease financial pressure on MFIs. Investment in fintech solutions is also vital to enable MFIs to operate despite insecurity.
Finally, awareness campaigns and capacity-building are essential to train MFIs in extended crisis management and enhance their resilience to security and economic challenges.
Despite the adversity, Kivu’s MFIs demonstrate remarkable resilience. Their survival now depends on coordinated support from governments, international donors, and specialized networks. With the necessary backing, these institutions can continue playing their essential role in the region’s economic and social reconstruction.
Together, let us act to preserve access to inclusive finance in the DRC.
Upcoming events:
- Training on Green Products, May 2025, Lome, Togo
- Training on the facet of EST and Gender, July 2025, Lome, Togo
- Training on Vulnerability Management and Assessment, July y 2025, Kigali, Rwanda
