”Beyond the Hype”: retrace (in better and worse) a 35-years odyssey of organizational change in microfinance from ledgers to algorithms

Yeasmin Farhana; Giuseppe Modarelli

doi:10.71159/icemit2520F

Authors

Yeasmin Farhana American Institute of Applied Sciences in Switzerland (AUS) and University of Asia Pacific (UAP), Bangladesh
Giuseppe Modarelli University of Turin, Italy and American Institute of Applied Sciences in Switzerland (AUS), Switzerland

DOI:

https://doi.org/10.71159/icemit2520F

Keywords:

microfinance institutions, digital transformation, financial inclusion, artificial intelligence, algorithmic bias

Abstract

This thematic review synthesises the technological evolution within Microfinance Institutions (MFIs) from 1990 to early 2025. It traces the journey from pre-digital manual systems through core banking computerisation, the mobile revolution and into the current frontier era of AI and blockchain. The analysis reveals that digital technologies have profoundly transformed MFIs's operations, driving significant gains in efficiency and financial inclusion by enabling new, digital-first models. However, this progress is tempered by persistent and emerging challenges. Critical gaps such as the digital divide, regulatory fragmentation, sustainability pressures, and ethical dilemmas concerning data privacy and algorithmic bias continue to threaten equitable outcomes. Literature review has made it possible to codify the evolutionary steps that have occurred. From this starting point, it has been possible to conceive, for better or for worse, the distinctive features of each era, concluding that for the realization of the technology's full potential necessitates a future focus on inclusive infrastructure, robust ethical governance and adaptive regulatory frameworks to ensure financial inclusion truly serves the most vulnerable populations.

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