Question

Al Majmoua Capital is a non-bank financing business that uses exclusive technology to provide financial services to microbusinesses within the agricultural value chain. It provides microcredits to smaller farmers and suppliers who are otherwise constrained in their ability to borrow sufficient funds from traditional funding sources (e.g. commercial banks). By enabling processors to pay farmers’ invoices early and at better rates using a digital platform (M-Trader), Al Majmoua Capital is an example of an inclusive business that promotes financial inclusion for small dairy farmers.
Crucial to the success of Al Majmoua is the role digital technology plays as the infrastructure for managing the entire value chain activities of the firm. The business uses M-Trader, a mobile app that enables suppliers to receive payments through their phones. The digital platform has a three-party operating system to capture value (extending loans and receiving payments) and is linked to a digital processor that facilitates monitoring and tracking of activities along the entire value chain. It permits a three-way interaction between farmers, processors and Capital, all of which take place on the same mobile app. The mobile app enables Al Majmoua Capital to extend loans directly to dairy farmers and to collect repayments from the milk processors. Instant text messages are generated to inform farmers when loans are disbursed and when repayments are collected. Processors, in turn, collect payments from farmers through a reduction in the amount they pay farmers each time they supply dairy products. All the data are captured in the digital processor (M-Trader) allowing Al Majmoua to track demand and supply, timing of repayments and instances of defaults. This means that Al Majmoua does not have to worry about farmers defaulting on their loan repayments.
Read the above case-study and answer the following questions

A- What role did digital technology play in the creation of Al Majmoua Capital distinctive business model?

B- From your knowledge of technology context, what technological challenges do you see facing Al Majmoua Capital’s business model?

Answer 1

1) Technology played a major role in Majmoulacapital distinct model.In every aspect we can the role of technology as the significant paetr in its work.It used the M trader as it is the tool for company to reach the customer. A company business model is an important representation of the company.The model deals with the creating the service and , infrastructure and providing customer portal,distribution chain, company product . Noe adays all the sectors looking at AI support in their business expansion.

Here M trade is an app where the retail lending is undergioing ,in this model it is a mobile app where every customer can use and recieve update. it's a three party digital platform, linked with digital processor that facilitates tracking, monitoring the loans. It recieves the payment from farmers, milk processors in an easy way and it immediately sends the message to the customers about the transactions in a text mesage. In the M trader there is a reminder about the payment process and make sure without having default payments. Time to time in update system is following to do not have any interreption between the customer and the organisation. It also anables to collect payment from the farmers through a reduction in the amount they pay farmers each time they supply diary products. This M trader can able to manage all the chain of transactions among the parties. People relay on mobile applications to monitor financial transactions.
It can eliminate the paper costs, ensuring correct format, retaining loan applications and maintaining a proper digital data so M trader is a succesful model.

2) In a competative environment the financial institutions, market and many societies rushing towards bussiness expansions, and have been adjusting to the bussiness models. It is now becoming obvious that the accelerating pace of technological change is the most creative force and also, the most destructive one in the financial services ecosystem today. There will be serious implications for trading desks, finance departments and risk managers.
It includes the problem like:
1. Cybercrime in finance
2. Regulatory compliance in finance system
3. Big data use in finance
4. Few people onlu support with the mobile apps
5. It is difficult to create trust.
6. data privacy is a major problem.
7. some models are not adoptable to changes.

Many more problems and challenges we need to face because of this model . However now a days AI using in every sector and works depending on the technology.