FINCA Impact Finance: The Future of Responsible Financial Services

Roman Hingorani, CFO, FINCA Impact FinanceRoman Hingorani, CFO
Operating in emerging economies with minimal financial infrastructure and little credit accessibility, FINCA Impact Finance is transforming finance in underserved markets. In frontier markets around the world, the company’s network of microfinance institutions and banks provide responsible financial services to low-income entrepreneurs and small business owners, delivering a double bottom line of social impact and profitability. “With 10,000 employees, two million customers and operations in 20 frontier markets, FINCA Impact Finance is creating robust credit policies and injecting efficiency into treasury management practices,” says FINCA Impact Finance CFO Roman Hingorani.

The Washington, DC-based firm provides financial products to underserved, financially excluded entrepreneurs while using an innovative business model that ensures business sustainability. FINCA Impact Finance’s model harnesses digital technology to make the business more efficient and sustainable while maintaining “touch”, trust and familiarity with the customer. One example of this model in action is FINCA Impact Finance’s use of digital tablets in the loan application process and extension of credit to small businesses such as restaurants, vendors, artisans and farmers. Loan Officers use tablets to complete the loan application forms allowing them to complete paperwork and gather signatures directly at the clients’ business locations—saving both staff and clients time and often arduous travel. The company’s innovative practices lead to quicker loan processing, which is further facilitated by credit scoring models that streamline the process. The company also offers credit scoring, centralized underwriting and e-wallets.

“Being a growing organization, our depositors include big corporate entities.

We are dedicated to ensuring stability for our loan customers and depositors,” continues Hingorani. To manage the concentration of risk that can arise from corporate deposits, the company has devised and implemented stringent liquidity management policies. It also employs rigorous processes to manage open currency risks, borrowing in hard currencies and on lends in local currencies. These practices act as hedging mechanisms, allowing the company to control its open currency positions on a daily basis. With mathematical modeling, cutting-edge algorithms and data visualization tools, it utilizes a range of mechanisms to reduce credit risks. At the same time, FINCA Impact Finance ensures local availability of credit through its global treasury desk, which can inject liquidity into the various entities it manages.

FINCA Impact Finance is doing more than transform traditional financial practices, however. It is also using innovative measures to redefine access to credit. For instance, the company operates in Democratic Republic of Congo, which has witnessed macroeconomic instability and lacks a regulatory framework to offer monetary bonds. In this challenging market, FINCA Impact Finance has been exploring ways to include citizens in the bond market, now serving 200,000 clients through its network of 1,200 agents.

FINCA Impact Finance is partnering with like-minded companies to develop and deliver responsible products and services that are customer-centric, efficient, competitive and profitable. By partnering with Fintech companies, FINCA Impact Finance can leverage cutting-edge tools and practices to make the global financial environment more inclusive. For instance, in Pakistan, the company has partnered with Finja, a leading Fintech startup, to launch SimSim, a mobile payment platform that has already reached over 100,000 customers. The company aims to reach all segments of society. With a goal to widen the net of credit access and financial inclusion, FINCA Impact Finance is poised to make credit accessible to two billion people across the globe.

FINCA Impact Finance stands apart from predatory lenders and conventional money-centric organizations, while also being profitable and providing value to shareholders and investors through higher returns on invested capital.