THE ROLE OF ARTIFICIAL INTELLIGENCE IN IMPROVING MICROFINANCE PRODUCTIVITY
Keywords:
artificial intelligence, microfinance, productivity
Abstract
More than two billion people do not have access to banking institutions, this is where the important role of microfinance distributes small loans to the poor so that they can access the financial industry. This study aims
to determine the role of artificial intelligence in improving the productivity of microfinance institutions. The qualitative research was employed with a library study approach by reviewing 25 selected journals indexed by Scopus and supported by Rank 1 and Rank 2 Science and Technology Index journals, with research published in 2000 – 2022. A sample of papers based on keywords in the publication was analyzed using bibliometric with VOSviewer application. The research results stated that microfinance institutions were established to provide benefits to poor and lowincome communities. The role of artificial intelligence can increase the productivity of the financial industry. Artificial intelligence can be used to analyze the feasibility and risk of default for customers and potential customers. The advantages of artificial intelligence include speed of decision-making, higher levels of automation for credit decisions, and the ability to be used remotely. In addition, artificial intelligence can also be used to generate investment signals that grow exponentially and generate data for future analysis.
-- PDF Article: https://drive.google.com/file/d/1mhlGyK1VfdcUJo7M_pyF-yzwSAuJxj90/view?usp=sharing
Downloads
Download data is not yet available.
References
[1] Krasota T, Bazhenov R, Mironova I, Abdyldaeva
U, Bazhenova N. Monetary history and money
types in digital economy. In: Humanities and
Social Sciences: Novations, Problems, Prospects
(HSSNPP 2019). Atlantis Press; 2019. p.802–806.
http://dx.doi.org/10.2991/hssnpp-19.2019.154.
[2] Sari SW. Development and thinking about
money from time to time [Perkembangan dan
pemikiran uang dari masa ke masa]. An-Nisbah:
Journal of Sharia Economics [An-Nisbah:
Jurnal Ekonomi Syariah]. 2016;3(1): 1–39.
https://doi.org/10.21274/an.2016.3.1.39-58.
[3] Albrecht C, Duffin KM, Hawkins S, Morales
Rocha VM. The use of cryptocurrencies in the
money laundering process. Journal of Money
Laundering Control. 2019;22(2): 210–216.
https://doi.org/10.1108/JMLC-12-2017-0074.
[4] Demirguc-Kunt A, Klapper L, Singer D, Ansar
S, Hess J. The global findex database 2017:
Measuring financial inclusion and the fintech
revolution. Washington DC: World Bank; 2018.
http://dx.doi.org/10.1596/978-1-4648-1259-0.
[5] Pohl M (ed.). Handbook on the history of European
banks. England: Edward Elgar Publishing; 1994.
[6] Korkmaz S. Impact of bank credits on economic
growth and inflation. Journal of Applied Finance and
Banking. 2015;5(1): 57–69.
[7] Kitomari JS, Abwe FG. Failure and collapse of village
community banks in Tanzania. General Education
Journal. 2016;6(1): 46–67.
[8] Dhakal CP, Nepal G. Contribution of micro-finance
on socio-economic development of rural community.
Journal of Advanced Academic Research. 2016;3(1):
134–141. https://doi.org/10.3126/jaar.v3i1.16623.
[9] Mokyr J. The past and the future of innovation: Some lessons from economic history. Explorations in Economic History. 2018;69: 13–26.
https://doi.org/10.1016/j.eeh.2018.03.003.
[10] Millar CC, Groth O, Mahon JF. Management innovation in a VUCA world: Challenges and recommendations. California Management Review. 2018;61(1):
5–14. https://doi.org/10.1177/0008125618805.
[11] Boden MA (ed.). Artificial intelligence. Amsterdam:
Elsevier; 1996.
[12] Turing AM. Mind a quarterly review or psychology
and philosophy computing machinery and intelligence. Machine intelligence. Routledge; 2012. p.1–
28.
[13] Premchander S, Prameela V, Chidambaranathan M,
Jeyaseelan L. Multiple meanings of money: How
women see microfinance. India: Sage Publications;
2009. https://doi.org/10.4135/9788132108191.
[14] Hudon M. Should access to credit be a right?
Journal of Business Ethics. 2009;84: 17–28.
https://doi.org/10.1007/s10551-008-9670-y.
[15] Robinson M. The microfinance revolution: Sustainable finance for the poor. United States of America:
World Bank Publications; 2001.
[16] Chen G, Xiao L. Selecting publication keywords for
domain analysis in bibliometrics: A comparison of
three methods. Journal of Informetrics. 2016;10(1):
212–223. https://doi.org/10.1016/j.joi.2016.01.006.
[17] Secinaro S, Calandra D, Petricean D, Chmet
F. Social finance and banking research as a
driver for sustainable development: A bibliometric analysis. Sustainability. 2020;13(1): 330.
https://doi.org/10.3390/su13010330.
[18] Acha Ikechukwu A, Acha I. Microfinance banking
in Nigeria: Problems and prospects. International
Journal of Finance and Accounting. 2012;1(5): 106–
111.
[19] Nwankwo O, Olukotu GA, Abah E. Impact
of microfinance on rural transformation
in Nigeria. International Journal of
Business and Management. 2013;8(19): 99.
http://dx.doi.org/10.5539/ijbm.v8n19p99.
[20] Banerjee A, Duflo E, Imbert C, Mathew S, Pande
R. E-governance, accountability, and leakage in public programs: Experimental evidence from a financial management reform in India. American Economic Journal: Applied Economics. 2020;12(4): 39–
72. http://dx.doi.org/ 10.1257/app.20180302.
[21] Tasos S, Amjad MI, Awan MS, Waqas M.
Poverty alleviation and microfinance for the economy of Pakistan: A case study of Khushhali
Bank in Sargodha. Economies. 2020;8(3): 63.
https://doi.org/10.3390/economies8030063.
[22] Bakari V, Magesa R, Akidda S. Mushrooming village
community banks in Tanzania: Is it really making a
difference? International Journal of Innovation and
Scientific Research. 2014;6(2): 127–135.
[23] Magali J. The role of village community banks (VICOBA) microcredits in promoting sustainable micro
and small scale industrialization in Kilimanjaro region, Tanzania. Journal of Education For Business.
20221;1(2): 1–12.
[24] Ahlén M. Rural member-based microfinance institutions: A field study assessing the impacts of SACCOS
and VICOBA in Babati district, Tanzania. Graduation
thesis. Sweden: Sodert ¨ orn University; 2012. ¨
[25] Ashta A (ed.). Advanced technologies for microfinance: Solutions and challenges: solutions and challenges. United States of America: IGI Global; 2010.
[26] Bumacov V, Ashta A, Singh P. The use of credit
scoring in microfinance institutions and their outreach. Strategic Change. 2014;23(7–8): 401–413.
https://doi.org/10.1002/jsc.1985.
[27] Ashta A. News and trends in Fintech and digital microfinance: Why are European MFIs invisible? FIIB Business Review. 2018;7(4): 232–243.
https://doi.org/10.1177/2319714518805183.
[28] Crosman P. Behind credit Suisse’s foray
into microlending to the global poor.
https://www.americanbanker.com/news/behindcredit-suisses-foray-into-microlending-to-the-globalpoor [Accessed 07th July 2023].
[29] Winarto WWA. The role of fintech in micro, small
and medium enterprises (MSMEs) [Peran Fintech
dalam Usaha Mikro Kecil dan Menengah (UMKM)].
Journal of Sharia Economics & Economics [Jurnal
Ekonomi Dan Ekonomi Syariah]. 2020;3(1): 61–73.
http://dx.doi.org/10.36778/jesya.v3i1.132.
[30] Abate GT, Rashid S, Borzaga C, Getnet K.
Rural finance and agricultural technology
adoption in Ethiopia: Does the institutional
design of lending organizations matter?
World Development. 2016;84: 235–253.
https://doi.org/10.1016/j.worlddev.2016.03.003.
[31] Vandeputte P, De Toffol B. The role of FinTechs in
the business model of microfinance institutions in
Western Europe: a qualitative study. Master’s thesis.
Belgium: Louvain School of Management; 2017.
[32] Benami E, Carter MR. Can digital technologies reshape rural microfinance? Implications for
savings, credit & insurance. Applied Economic
Perspectives and Policy. 2021;43(4): 1196–1220.
https://doi.org/10.1002/aepp.13151.
[33] Laven M, Bruggink D. How FinTech is transforming
the way money moves around the world: An interview
with Mike Laven. Journal of Payments Strategy &
Systems. 2016;10(1): 6–12.
[34] Ashta A, Herrmann H. Artificial intelligence and
fintech: An overview of opportunities and risks
for banking, investments, and microfinance.
Strategic Change. 2021;30(3): 211–222.
https://doi.org/10.1002/jsc.2404.
[35] Morduch J. The microfinance promise. Journal of
Economic Literature. 1999;37(4): 1569–614.
[36] Ghatak M, Guinnane TW. The economics of lending with joint liability: theory and practice. Journal
of Development Economics. 1999;60(1): 195–228.
https://doi.org/10.1016/S0304-3878(99)00041-3.
[37] Flatnes JE, Carter MR, Mercovich R. Improving
the quality of index insurance with a satellite-based
conditional audit contract. United States: Department
Of Agricultural and Resource Economics, University
of California; 2019.
[38] Widayanti I, Sari SWHP. The role of DSN-MUI
Fatwa in Indonesian Sharia banking development
flows in the industrial revolution 4.0. El-Qish:
Journal of Islamic Economics. 2023;3(1): 29–44.
https://doi.org/10.33830/elqish.v3i1.6519.2023.
U, Bazhenova N. Monetary history and money
types in digital economy. In: Humanities and
Social Sciences: Novations, Problems, Prospects
(HSSNPP 2019). Atlantis Press; 2019. p.802–806.
http://dx.doi.org/10.2991/hssnpp-19.2019.154.
[2] Sari SW. Development and thinking about
money from time to time [Perkembangan dan
pemikiran uang dari masa ke masa]. An-Nisbah:
Journal of Sharia Economics [An-Nisbah:
Jurnal Ekonomi Syariah]. 2016;3(1): 1–39.
https://doi.org/10.21274/an.2016.3.1.39-58.
[3] Albrecht C, Duffin KM, Hawkins S, Morales
Rocha VM. The use of cryptocurrencies in the
money laundering process. Journal of Money
Laundering Control. 2019;22(2): 210–216.
https://doi.org/10.1108/JMLC-12-2017-0074.
[4] Demirguc-Kunt A, Klapper L, Singer D, Ansar
S, Hess J. The global findex database 2017:
Measuring financial inclusion and the fintech
revolution. Washington DC: World Bank; 2018.
http://dx.doi.org/10.1596/978-1-4648-1259-0.
[5] Pohl M (ed.). Handbook on the history of European
banks. England: Edward Elgar Publishing; 1994.
[6] Korkmaz S. Impact of bank credits on economic
growth and inflation. Journal of Applied Finance and
Banking. 2015;5(1): 57–69.
[7] Kitomari JS, Abwe FG. Failure and collapse of village
community banks in Tanzania. General Education
Journal. 2016;6(1): 46–67.
[8] Dhakal CP, Nepal G. Contribution of micro-finance
on socio-economic development of rural community.
Journal of Advanced Academic Research. 2016;3(1):
134–141. https://doi.org/10.3126/jaar.v3i1.16623.
[9] Mokyr J. The past and the future of innovation: Some lessons from economic history. Explorations in Economic History. 2018;69: 13–26.
https://doi.org/10.1016/j.eeh.2018.03.003.
[10] Millar CC, Groth O, Mahon JF. Management innovation in a VUCA world: Challenges and recommendations. California Management Review. 2018;61(1):
5–14. https://doi.org/10.1177/0008125618805.
[11] Boden MA (ed.). Artificial intelligence. Amsterdam:
Elsevier; 1996.
[12] Turing AM. Mind a quarterly review or psychology
and philosophy computing machinery and intelligence. Machine intelligence. Routledge; 2012. p.1–
28.
[13] Premchander S, Prameela V, Chidambaranathan M,
Jeyaseelan L. Multiple meanings of money: How
women see microfinance. India: Sage Publications;
2009. https://doi.org/10.4135/9788132108191.
[14] Hudon M. Should access to credit be a right?
Journal of Business Ethics. 2009;84: 17–28.
https://doi.org/10.1007/s10551-008-9670-y.
[15] Robinson M. The microfinance revolution: Sustainable finance for the poor. United States of America:
World Bank Publications; 2001.
[16] Chen G, Xiao L. Selecting publication keywords for
domain analysis in bibliometrics: A comparison of
three methods. Journal of Informetrics. 2016;10(1):
212–223. https://doi.org/10.1016/j.joi.2016.01.006.
[17] Secinaro S, Calandra D, Petricean D, Chmet
F. Social finance and banking research as a
driver for sustainable development: A bibliometric analysis. Sustainability. 2020;13(1): 330.
https://doi.org/10.3390/su13010330.
[18] Acha Ikechukwu A, Acha I. Microfinance banking
in Nigeria: Problems and prospects. International
Journal of Finance and Accounting. 2012;1(5): 106–
111.
[19] Nwankwo O, Olukotu GA, Abah E. Impact
of microfinance on rural transformation
in Nigeria. International Journal of
Business and Management. 2013;8(19): 99.
http://dx.doi.org/10.5539/ijbm.v8n19p99.
[20] Banerjee A, Duflo E, Imbert C, Mathew S, Pande
R. E-governance, accountability, and leakage in public programs: Experimental evidence from a financial management reform in India. American Economic Journal: Applied Economics. 2020;12(4): 39–
72. http://dx.doi.org/ 10.1257/app.20180302.
[21] Tasos S, Amjad MI, Awan MS, Waqas M.
Poverty alleviation and microfinance for the economy of Pakistan: A case study of Khushhali
Bank in Sargodha. Economies. 2020;8(3): 63.
https://doi.org/10.3390/economies8030063.
[22] Bakari V, Magesa R, Akidda S. Mushrooming village
community banks in Tanzania: Is it really making a
difference? International Journal of Innovation and
Scientific Research. 2014;6(2): 127–135.
[23] Magali J. The role of village community banks (VICOBA) microcredits in promoting sustainable micro
and small scale industrialization in Kilimanjaro region, Tanzania. Journal of Education For Business.
20221;1(2): 1–12.
[24] Ahlén M. Rural member-based microfinance institutions: A field study assessing the impacts of SACCOS
and VICOBA in Babati district, Tanzania. Graduation
thesis. Sweden: Sodert ¨ orn University; 2012. ¨
[25] Ashta A (ed.). Advanced technologies for microfinance: Solutions and challenges: solutions and challenges. United States of America: IGI Global; 2010.
[26] Bumacov V, Ashta A, Singh P. The use of credit
scoring in microfinance institutions and their outreach. Strategic Change. 2014;23(7–8): 401–413.
https://doi.org/10.1002/jsc.1985.
[27] Ashta A. News and trends in Fintech and digital microfinance: Why are European MFIs invisible? FIIB Business Review. 2018;7(4): 232–243.
https://doi.org/10.1177/2319714518805183.
[28] Crosman P. Behind credit Suisse’s foray
into microlending to the global poor.
https://www.americanbanker.com/news/behindcredit-suisses-foray-into-microlending-to-the-globalpoor [Accessed 07th July 2023].
[29] Winarto WWA. The role of fintech in micro, small
and medium enterprises (MSMEs) [Peran Fintech
dalam Usaha Mikro Kecil dan Menengah (UMKM)].
Journal of Sharia Economics & Economics [Jurnal
Ekonomi Dan Ekonomi Syariah]. 2020;3(1): 61–73.
http://dx.doi.org/10.36778/jesya.v3i1.132.
[30] Abate GT, Rashid S, Borzaga C, Getnet K.
Rural finance and agricultural technology
adoption in Ethiopia: Does the institutional
design of lending organizations matter?
World Development. 2016;84: 235–253.
https://doi.org/10.1016/j.worlddev.2016.03.003.
[31] Vandeputte P, De Toffol B. The role of FinTechs in
the business model of microfinance institutions in
Western Europe: a qualitative study. Master’s thesis.
Belgium: Louvain School of Management; 2017.
[32] Benami E, Carter MR. Can digital technologies reshape rural microfinance? Implications for
savings, credit & insurance. Applied Economic
Perspectives and Policy. 2021;43(4): 1196–1220.
https://doi.org/10.1002/aepp.13151.
[33] Laven M, Bruggink D. How FinTech is transforming
the way money moves around the world: An interview
with Mike Laven. Journal of Payments Strategy &
Systems. 2016;10(1): 6–12.
[34] Ashta A, Herrmann H. Artificial intelligence and
fintech: An overview of opportunities and risks
for banking, investments, and microfinance.
Strategic Change. 2021;30(3): 211–222.
https://doi.org/10.1002/jsc.2404.
[35] Morduch J. The microfinance promise. Journal of
Economic Literature. 1999;37(4): 1569–614.
[36] Ghatak M, Guinnane TW. The economics of lending with joint liability: theory and practice. Journal
of Development Economics. 1999;60(1): 195–228.
https://doi.org/10.1016/S0304-3878(99)00041-3.
[37] Flatnes JE, Carter MR, Mercovich R. Improving
the quality of index insurance with a satellite-based
conditional audit contract. United States: Department
Of Agricultural and Resource Economics, University
of California; 2019.
[38] Widayanti I, Sari SWHP. The role of DSN-MUI
Fatwa in Indonesian Sharia banking development
flows in the industrial revolution 4.0. El-Qish:
Journal of Islamic Economics. 2023;3(1): 29–44.
https://doi.org/10.33830/elqish.v3i1.6519.2023.
Published
05-June-2024
How to Cite
1.
Putra S, Subhan ZA MA, Hardianti AR, Rachmadana SL. THE ROLE OF ARTIFICIAL INTELLIGENCE IN IMPROVING MICROFINANCE PRODUCTIVITY. journal [Internet]. 5Jun.2024 [cited 22Dec.2024];14(2). Available from: https://journal.tvu.edu.vn/tvujs_old/index.php/journal/article/view/3765
Section
Articles
