MC Systems (MCS), through its fintech subsidiary Phoenix International, this week signed a memorandum of understanding (MOU) with the Jamaica Association of Microfinancing (JAMFIN) to bolster the digital capabilities of the local microfinancing industry.

At a signing ceremony on Monday the digital transformation company, which also serves a number of customers across Latin America and the Caribbean, said it will supply JAMFIN members with world-class digital products to unlock greater growth for the sector. Under the MOU, JAMFIN members will also benefit from access to the core banking system and other financial solutions offered by Phoenix and MC Systems.

The partnership will also provide incentives that will drive the use of new and modern financial solutions to strengthen operational efficiencies while improving customer experience across the JAMFIN network.

“Microfinancing enterprises are leveraging technology to grow and become more competitive. However, most providers are not aligned with our niche requirements, therefore the main objective of this MOU is to ensure mutual understanding of industry needs and opportunities to leverage financial technology through awareness programmes and member engagements,” stated Dmitri Dawkins, commercial director of Phoenix International.

“As a Jamaican firm we are familiar with the complexities of accessing and integrating financial services and products because of compliance and regulatory requirements. Given our extensive knowledge we can therefore guide these financial institutions in moving past obstacles while helping them to better focus on core operations and to serve their customers,” Dawkins said.

Phoenix, which since 2020 said it has invested over $6 million to modernise and upgrade its core banking platform, is seeking to meet the needs of financial institutions and clients across the region. Through its parent company, MC Systems the entity has been equipped to offer agile software products and services in keeping with some of the latest technologies across the region.

Through varied solutions and on the go technologies — including remittance applications, payment systems, and loan management infrastructure — the digital transformation company aims to bolster the service delivery of microfinance institutions locally, enabling them to leapfrog the competition, increase profitability, and create new avenues for revenue generation.

“At MC Systems we design technology for the people which, over time, have been helped to transform the local landscape, bridging the gaps to drive digital and financial inclusion. We understand technology and know the industry, and I believe there is going to be mutual benefits for both entities — and I can’t wait to see how the relationship will actualise,” added Dwayne Russell, general manager of MC Systems.

JAMFIN on the other hand, in fulfilling its mission of forging stronger alliances with public and private sector partners locally and internationally, also said it will, through this latest partnership, provide much-needed service to its members while ensuring that as an industry their needs are met.

“JAMFIN is proud to be a staunch advocate for microfinance institutions, supporting growth and national development. This connection with Phoenix International will assist us in enhancing our understanding of contemporary banking and lending goods, and with the sharing of our own industry experiences we anticipate a developing relationship and a rising demand for business enhancements within our association,” commented Dr Blossom O’Meally Nelson, chairperson for JAMFIN.

Chiding the Bank of Jamaica (BOJ) for the slow pace at which it was issuing licences to microfinance institutions, she said that a lot more growth and development is expected to come for the industry once more players are approved. She then lauded Access and Dolla Financial as two of the top institutions that have been exemplary for the industry.

Following the passage of the Microcredit Act in 2021, microfinance institutions by law must now be licensed and approved by the BOJ in order to offer financial services to individuals and micro, small and medium-sized enterprises (MSMEs). This, as Government moves to regulate the industry, stamp out predatory practices, protect customers, and bring increased transparency to the sector.

Labelled as one of those sectors responsible for bringing growth to the economy, the microfinance industry has been instrumental in providing financial services through credit to low-income individuals or groups who are typically excluded from the traditional banking sector. The Development Bank of Jamaica (DBJ) said it has, since the inception of its microfinance window in 2009, lent approximately $11.9 billion to microfinance institutions (MFI). PwC data also reveal that the industry is expected to increase by as much as US$224 billion by 2026.

“The introduction of digitisation at this level will certainly encourage efficiency, improve bottom lines and service delivery,” Nelson further said.