3

Theme- Micro-Finance & Technology

Credit Cooperatives).  There is no

difference in how interest is

computed, i.e. either flat or

authentic data as to how many MFIs

declining.

have  automated  management

information systems (MIS).

3)

Insurance retailing applications:

Currently, most MFIs find it easy to

Y Vector: As per this application, the

offer insurance to their clients at no

technology  used  for  capturing

additional cost. Insurance services

transactions in the field are

are combined with the credit-and-

saving services currently offered.

1)

Mobile technology: This enables

These MFIs are retailers of big

the field staff to capture the

insurance companies. Appropriate

transactions in the field itself. Such

software is required to enter the

applications are also known as

collection of premium and forward

automated field transactions.

these premiums to the concerned

These devices are used for the

insurer. The challenge lies in

entry of transactions in the field.

collecting the premium from the

branch offices and depositing it

2)

Desktop-based application: Used

with the Insurer from the head

for back-office MIS, all the

office. Claims have to be settled

transactions are first captured

at the branch level and they have

manually and then fed into MIS

to be collected from the Insurer at

and later, MIS is used to produce

the head-office level.

reports  for  monitoring  the

operation from a central point.

4)

Credit Cooperatives: There are

Usually such applications are

many credit cooperatives that

loaded on a system in an MFI

IT-powered

deliver multiple financial services ­

branch office.

systems prohibit

credit, deposit, insurance and

anything other

trading. Till recently, they have

3)

Consolidation MIS: Consolidation

than what is

used only accounting packages

is another important component of

standard.

but are now looking for loan

MIS. It is required not only for

tracking systems. A comprehensive

multiple-branch MFIs but also for

software that provides all the

single-branch MFIs because the

financial services is required.

MFI is likely to expand and add

more branches in future.

5)

Rural  Banking:  Both  district

cooperative banks and regional

4)

Knowledge management: Once

rural banks require software that

the data from multiple branches is

can enable them to carry out all

consolidated, they are stored in a

banking transactions. Many IT

database. For the purpose of

companies are servicing this

building

of

Knowledge

segment. All these applications

Management applications, multi-

have architecture that draws

dimensional  databases  are

inspiration  from  mainstream

developed for storing them.

banking.  These  applications

Database mining tools, such as ETL

require to be properly customised

and OLAPs, are used to transform

since they need to be integrated

data into knowledge.

with SHG, JLG and the Individual

methods of lending.

Advantages of IT Solutions:

6)

Chit fund company: This is a much

The use of IT offers several advantages,

older operation and all the big chit

spurring the growth of the microfinance

fund companies have evolved

industry:

their own automated systems.

1.

Attends to key constraints of the

7)

E-commerce applications: In the

microfinance industry such as

rural areas, practitioners are yet to

volume, human error due to

work

out

e-commerce

volume of work or fatigue, and

applications.

other security-related issues.

Automation takes on the complete

Most MFIs currently use the first and

volume load and provides staff

second applications listed above while

with the extra time needed for

cooperatives use the fourth one (See

follow-ups.  On  this  count,