Cooperative Bank of Oromia (Coopbank) has revealed that, in less than three years, more than 30 billion birr in loans have been disbursed to 1.8 million accounts through its digital lending platform, Michu.
This accomplishment, announced on Tuesday, highlights the platform’s critical role in promoting financial inclusion and empowering a demographic that traditional banking has ignored.
Michu’s success stems from its emphasis on the “bottom of the pyramid”—small business owners, informal traders, and micro, small, and medium-sized enterprises (MSMEs), many of which lack the credit history or collateral needed for conventional loans.
Michu uses AI-powered scoring system to offer uncollateralised loans
Michu uses an AI-powered credit scoring system to offer uncollateralised loans, meeting a vital financial need and allowing these companies to expand, add jobs, and boost the local economy.
This strategy plays a crucial role in fostering an inclusive economy that distributes opportunities fairly.
Their capacity to invest, grow, and handle their finances is severely constrained when a sizable section of the populace is shut out of formal financial services.
By filling this gap, platforms such as Michu make sure that even the smallest businesses have the funding they need to prosper, which in turn promotes national economic growth and the fight against poverty.
Introduction of digital agri-loans to empower Ethiopian farmers
Techpression reported in June that the Cooperative Bank of Oromia (Coopbank) launched its Digital Agri Input Financing Product, a major step toward transforming Ethiopia’s agricultural sector with inclusive, tech-enabled financial solutions.
As part of its pilot phase, the bank disbursed its first loan to a female farmer in the malt barley value chain in Arsi and West Arsi.
The pilot aims to reach over 5,000 farmers, marking the beginning of a three-year plan to empower more than 3 million farmers nationwide, in line with Coopbank’s mission to empower communities and transform lives.
In collaboration with Rabo Bank, this innovative Digital Agri Input Financing Solution aims to remove long-standing obstacles in the agricultural industry by providing easy access to capital, advisory services, premium inputs, markets, and insurance.
With the help of cutting-edge technologies, this solution makes use of alternative credit scoring derived from Farm Pass farmer profiles and transaction data, integrates it with data from remote sensing, and makes use of sophisticated loan monitoring tools to enable inclusivity and scalability.