Technology Readiness, MIS for Business Expansion

1. Technology Readiness, MIS for Business Expansion Reji Varghese AVP – IT Consulting , BASIX

2. Success Stories in MFI’s/NGOs • IT Innovations at SNFL • Pre-Installation • No system for portfolio tracking • Low OTRR • NPA levels were high • Post Installation of MIS • Designed and Implemented MIS systems • Monitoring and feedback systems are stabilized • Initially used ‘Famis Plus’ and presently updated to Oracle based ERP system ‘DELPHIX’ • Operating in 6 states with more than 1o,000 villages • OTRR -99% , NPA reduced, 5 lakhs customers at present

3. Success Stories in MFI’s/NGOs • SARC, Sambalpur • Funds received to this institution after MIS systems were installed • O/s increased from 2 Lakhs to 60 lakhs with in 1 ½ year • Presently entire portfolios are monitored and even IDPD collected in case of delay in repayments • Equitas, Chennai • E-Documents • SMS based tracking • Central Database and data processing at central place • Now moved into Core Banking System

4. Success Stories in MFI’s/NGOs • BASIX • MIS systems were developed from the day one • Well structured systems are in place • Good portfolio tracking and monitoring systems • 1 million credit customers and 2 million Insurance transactions are processed in a month • ½ million non-credit transactions are captured • Entire Audit process completes with in 10-15 days • 17 states, 130 units monthly MIS reports are consolidated with in less time • Now moving into central processing and mobile based loan repayment systems • Setup its own IT division called ‘ITSL’ and serves technology initiatives of group companies and NGO/MFI sector

5. Thus, Technology initiatives are best investment decision rather being considered as cost center….

6. Why you need an MIS? • Scaling up strategies • Right information at right time is the key to success • Plays Vital role in strategic decisions • Expand client reach • Reduce cost of transactions • Improvements in quality of work • To analyse critical operational parameters • To Strengthen financial performance • Pinpoint those areas which require immediate attention • Increase the efficiency of Human Resources • Motivate field staff and to create healthy competition

7. Key elements of a better MIS • 100% Automation of all business/functional areas • Integrity between operational modules to financial accounting • Data Security and interoperable • Flexible Loan, Insurance and Savings product definitions and its revisions • Automated Loan Documentations • Tools for controlling Risk Management and controls for effective monitoring • Various MIS reports for analysis from field level to top management

8. System should have Critical Information requirements of various stake holders such as • Field staff operations info. • Management Reporting • Statutory requirements • Funding agencies reporting • Customer MIS • Service Delivery • Internal Controls

9. Field staff information.. • Loans appraised/sanctioned Vs disbursement particulars • Day wise collection statements • Loans overdue reports • Portfolio Performance Reports

10. Management Reporting • Operating Summaries • Weekly (Inflows & Outflows at branch level) • Monthly (Demand, Collection and Balances) • Employee Performance Reports • Key Portfolio Indicators (Financial Health) • Loan Outstanding & No. of A/C’s • Repayment % • Principal At Risk (PAR) • Non Performance Assets (NPA) • Aging Analysis of Overdue • Financial Ratios

11. Financial Accounting • Savings/Cash Security Particulars • Financial Accounting Statements • Borrower/Member Sub-ledgers and balances • Secured/Unsecured loan portfolio details • Income (Interest earned on loans) particulars • Trial Balance , P & L, Balance Sheet etc.

12. Other major area requiring automation, field transactions using Mobile/HHD/POS • To develop a foolproof system for handling field transactions • To reduce the workload of data entry • To acknowledge the receipt of the payment at the field • To reduce the transaction cost • Automate until the last mile of the financial transaction • To facilitate better interaction with the customer • Reduce human errors

14. Various MIS Solutions.. • Client- Server architecture at the initial level which costs around 2 to 5 lakhs • Web based solutions ( .Net . Java etc.) • Central Processing systems , CBS or ERP solutions which cost starts from 20 Lakhs based on number of branches and modules • RDBMS based on Oracle, SQL Server are better options • Open source solutions are available • It is better to use mobile/HHD devices to automate field transactions

15. Key Learning's • Recruitment of cross domain (IT and Functional) specialists for managing ICT projects is always useful • IT together with Institutional Support is mandatory • Selection of Technology and IT partner • Adopt IT as a strategy and align with business needs • Be practical in your thinking and have patience during implementation and stabilization of system • An MIS will not meet all the flexibility hoped for • Good Project management and documentation practice • Involvement of all user groups in system development/Implementation • Continuous training to the end user

16. Suggestions to the sector, out of experience.. • Assess your IT needs • Initiate the process • Acquire good IT Solutions • Adopt IT in your business • Make your life simple ..

17. Thank You.. rvarghese@basixindia.com, www.basixindia.com