Technologies used in micro finance Part -2

Micro Finance:

Micro-finance is now recognized as a cost effective and sustainable way of expanding outreach of the banking system to the rural poor. The guiding spirit behind microfinance initiatives of the formal banking sector has been : To offer cost effective approach to formal institutions for expanding outreach to poor; To develop collateral substitutes; To focus on the rural and the urban poor, especially women; To pilot test other micro-credit delivery mechanisms as alternative channels to the formal banks; To effectively pursue the objectives of macro-economic growth.There are two major models under microfinance, i.e., Self-Help Group (SHG)-Bank Linkages and Micro-Finance Institutions (MFI) - Bank Linkages being operated in the country.MFIs employ an army of field agents to provide doorstep banking. This manual approach translates into higher cost of servicing and operational inefficiencies because of multiple hand-offs in record keeping. The need gap is to provide better processes, customized products and automated systems to these MFIs so that they can overcome the constraints of manuals processes. Less than 10% of micro finance institutions use commercially developed management information systems. The vast majority of micro finance institutions use back-end systems that were developed internally or they use spreadsheets to manage their client and transaction history.In many of these organizations, the systems are elementary and more useful in keeping accounts rather than in comprehensively gathering and analyzing data. These results in problems with early detection of default, lack of system maintenance, and inability to perform data mining for micro level analysis. SOME ORGANIZATIONS provides a shared technology platform to MFIs to manage their data electronically at the same time ensure that they do not loose the last mile human interface to their end customers. SOME ORGANIZATIONS system supports the SELF HELP GROUP MODEL, JOINT LIABILITY GROUP MODEL and PARTNERSHIP MODEL based operations adopted by various MFIs. Thus, MFIs are assured of early availability of data to make timely decisions. In addition, field level request enablement on SOME ORGANIZATIONS system ensures that MFI are timely and suitably empowered to service new relationship requests quickly and adequately