The following blog article is a summary of my personal knowledge and experience, from my 2018 summer internship in Manila, Philippines as a Business Development Intern at then, biggest branch of Oradian.
Oradian is a provider of SaaS banking solution for underserved microfinance institutions (MFIs), microfinance banks (MFBs), rural banks and Saccos, struggling to grow with the solutions available currently in many emerging markets. The company has been founded in 2012 by Antonio Separovic, Julian Oehrlein and Onyeka Adibeli. The goal? – Providing financial inclusion in previously underserved markets.
Plenty of emerging markets worldwide have to combat dozens of inefficiencies related strictly to the living conditions of many of their citizens. Lack of proper financial infrastructure being one of them, and by infrastructure I want to point out obvious fact – still to this day 59% of world population lacks internet access and 1.7 Billion adults are unbanked (they do not have any bank account and/or are unable to open one). This means that the only financial institution that can serve their needs is either ‘under their mattress’ or any MFI, MFB or Coop working in the village/community nearby. Those microfinance institution mostly rely on local conditions and workforce, meaning that plenty of them do not have qualified clerks, accountants or software and hardware to analyse the flow of funds through the institution. Despite low earnings in those mostly rural areas, MFIs can sometimes amass hundreds of thousands of dollars worth of cash, while still keeping their accounting in a notebook, writing in pencil and operating inefficiently with each transaction.
Usually solution here is some sort of banking software to help those institutions operate, while still providing them with cutting-edge technology, lowering costs and improving efficiency of workforce. Yet most of those banking software is (was, in 2018) too expensive one time investment for an MFI, resulting in lack of purchase, due to the cost constrains, and a closed circle of poverty and under-investment.
Oradian therefore needed to enter the market with a different offering. They have decided to go with subscription based SaaS online banking software. This way they mitigated the costs of purchasing and investing in expensive hardware, for the system did all the calculations on company’s server. To help those communities access the software, included in subscription was the 3G internet access, and the software was optimised in such way that it could operate in low-volume-transfer reality of even 2G internet access. Plenty of software functionalities have been adopted to the needs of local tax legislators, and the results were staggering.
Within few years of operating in the Philippine market, the island nation became the main market for this Croatian start-up, becoming a defacto market leader for previously overlooked MFIs, MFBs and Saccos. Growth of customers was sustained exponential for some time and the company scaled up its operations not only in Philippines but also worldwide. Nowadays Oradian operates mainly in Ghana, Nigeria and Philippines, but it’s portfolio of clients reaches out to dozens of nations across Africa and Asia.
For me, working there was one of the best experiences of my early career, forcing me to properly analyse thinking out-of-the-box, allowing me to understand different market conditions outside of European point of view. I am looking with optimism towards developments within microfinance market, and definitely I see that business solutions, strategy within information technology and engineering software towards the customers work best when you aim for win-win solution for your company and its clients.
References
Click to access 2017%20Findex%20full%20report_chapter2.pdf
https://www.statista.com/statistics/617136/digital-population-worldwide/
https://www.oriadian.com/
Hi Marcin,
Thank you for this post! I had not heard of Oradian before, but I will definitely do some research now. I personally think MFI, despite its many challenges, is an amazing opportunity for emerging economies. If I am correct, I think in India they have also been focusing on digitising opportunities to speed up how micro-finance is executed. I am actually also quite curious, what exactly did you cover in your internship? And would you ever consider this sector?
Hey Olivia! Sorry for late reply. Microfinance exists basically everywhere outside of developed economies. We were also considering going to India at times but back then Indian Software despite being inferior to our solution was just way cheaper and we couldn’t compete on the market with thiem. During my internship I was mainly contacting potential leads in Philippines and doing Market Research for new markets. Company wanted to scale up to different markets, so I was responsible for screening Bangladesh, Vietnam, Cambodia and Sri Lanka as potential new market destinations. I would definitely consider working in this sector again, Microfinance is extremely interesting and you have a feeling of ‘doing something good’ because you provide banking to poor, unbanked people or sectors.