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DOI: The Role of Digitalization and Automation of Operational Processes as A Key Factor for Diversifying the Product Line in The Microfinance Sector
Diusheeva Aizhan , Operations Manager and Board Member of the Salym Finance Microfinance Company Bishkek, KyrgyzstanAbstract
In the context of the accelerating digital transformation of the financial industry, microfinance organizations (MFOs) are compelled to rethink and restructure their business models in order to maintain competitive advantages and strengthen the social impact of their activities. This study examines how digitalization and automation of key operational circuits serve as a fundamental driver for expanding the product line of MFOs. The purpose of the work is to identify causal links between the implementation of advanced technological tools — including Loan Origination System (LOS) class systems and the use of artificial intelligence (AI) in credit scoring procedures — and the ability of organizations to go beyond classical microcredit, forming a broader product portfolio. Methodologically, the study relies on a systematic review of academic sources, a comparative analysis of the markets of the United States, Europe, and Kyrgyzstan, as well as a detailed case study of comprehensive automation of one MFO in Kyrgyzstan. The results obtained indicate that achieving a threshold level of operational efficiency through automation — expressed in reduced application processing time and lower costs — frees managerial and financial resources necessary for designing and launching more complex products, such as microinsurance, digital savings instruments, and mortgage programs. Thus, the initial hypothesis is confirmed: operational transformation is not an end in itself, but serves as a mandatory precondition for strategic diversification. The conclusions drawn have practical significance for MFO managers, financial market regulators, and researchers in the fields of financial technologies and inclusive growth.
Keywords
microfinance, digitalization, automation, product diversification, credit conveyor, artificial intelligence
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