Convergent Microfinance Strategy: Combining Fintech and Conventional Methods to Enhance Rural Financial

Sylviana  Maya Damayanti; Acip  Sutardi; Raden  Aswin Rahadi; Arinda  Mentari Putri; Aghnia  Nadhira Aliya Putri; Rozan  Hanifan

doi:10.48161/qaj.v6n1a2076

Authors

Sylviana Maya Damayanti School of Business and Management, Institut Teknologi Bandung (ITB), Bandung, Jawa Barat 40132, Indonesia.
Acip Sutardi School of Business and Management, Institut Teknologi Bandung (ITB), Bandung, Jawa Barat 40132, Indonesia.
Raden Aswin Rahadi School of Business and Management, Institut Teknologi Bandung (ITB), Bandung, Jawa Barat 40132, Indonesia.
Arinda Mentari Putri School of Business and Management, Institut Teknologi Bandung (ITB), Bandung, Jawa Barat 40132, Indonesia.
Aghnia Nadhira Aliya Putri School of Business and Management, Institut Teknologi Bandung (ITB), Bandung, Jawa Barat 40132, Indonesia.
Rozan Hanifan School of Business and Management, Institut Teknologi Bandung (ITB), Bandung, Jawa Barat 40132, Indonesia.

DOI:

https://doi.org/10.48161/qaj.v6n1a2076

Keywords:

causal loop diagrams, financial inclusion, hybrid microfinance, rural finance.

Abstract

Financial inclusion in rural areas continues to face challenges due to poor infrastructure, low digital literacy, and resistance to financial technology. While both traditional microfinance and fintech have tried to address these issues, implementing them separately often leads to inefficiencies and low adoption. This study explores hybrid microfinance models that combine both approaches, using a system dynamics method with Causal Loop Diagrams (CLDs) to analyze interactions between technological, social, and operational factors. Data were gathered through stakeholder interviews and thematic analysis to map key feedback loops and intervention points. The findings highlight three core drivers of success: (1) Infrastructure Development, emphasizing connectivity and platform access; (2) Social Dynamics, focusing on financial literacy and trust to reduce resistance; and (3) Operational Innovation, which includes staff training, strategic resource use, and partnerships. Results suggest that a holistic strategy combining infrastructure investment, community engagement, and operational improvements is essential for advancing sustainable financial inclusion. Inclusive digital service design, targeted education, and supportive regulation are emphasized in the study as interventions to establish trust and improve accessibility in the rural contexts.

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