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Branchless Banking have many benefits. However following are some of the major benefits. Reduced cost of delivery of Financial Services. Extended outreach. Agent Model can increase loyalty towards MFI. © Craft Silicon.
The solution works on a POS ( Handheld ) and allows the MFI to provide following services online to their customers anywhere Authenticates the customer using a BIO Metrics Technology / PIN technology Savings Deposit Savings Withdrawal Loan Application Loan repayment Loan Disbursement Balance Enquiry and Account Statements Group Transactions Mobile Top-ups Utility Payments Money Transfers ( Accounts / Non-Accounts ) Credit Scoring Sheets Reports Reconciliation © Craft Silicon.
MFI Can operate POS where by they give the POS units to their CREDIT OFFICERS who can go in the field and make required transactions. MFI can appoint agents who can allow the customers to make transactions. This way the MFI can have outlets where customers can be served. These agents can be shop keepers, Petro Stations, etc. © Craft Silicon.
Almost 80% of PIN Frauds are intra family. PIN procurement, Disbursement PIN delivery and PIN Mailers Card / PIN Database management Reissuance of a lost / stolen PIN Postage / Courier charges after stolen PIN Forgetting / Sharing PIN very common with semi – literate and illiterate people. What you know ( PIN ) and what you have ( Card ) – Makes you the owner of someone account. © Craft Silicon.
Finger prints stay unchanged throughout a persons life. The probability of two persons having identical fingerprints is 0.1 in 10 9 Even Twins have different fingerprints. Fingerprint changes within a second when a person dies or finger chopped. © Craft Silicon.
Bio metrics are technology automatically authenticate, identify or verify an Individual based on physiological behavioral characteristics. They can not be lost They can not be forgotten Cannot be passed from one person to another. Quite impossible to forge. Biometrics authentication reduces the administrative hassle and headaches associated with identification of people. BIO Metrics can be thought as a secure key that can be used by only one person. © Craft Silicon.
One of the biggest advantages of the Craft Silicon solution is that it puts the onus of identity proof on the account holder and not the bank and that means a whole lot of less customer care issues and litigation to deal with. © Craft Silicon.
Craft Silicon recommends an ONLINE solution compared to a SMART CARD solution. SMART Cards are good for solutions that are offline. SMART Cards transactions must be reconciled at regular intervals. We use GPRS ( Mobile ) Technology to connect to core system. GPRS in Kenya costs about 25 US$ per month ( about 2000 Transactions ). GPRS / CDMA is generally not very expensive globally. This means that system can work at any place where there is a mobile network. Compared to SMART card solution, this system is more secure since the transactions are processed online. A SMART Card costs about 5US$, While a MAG STRIPE card costs 1 US$. © Craft Silicon.
Bankers Realm EFT SWITCH can be integrated to various delivery channels. It can drive POS / ATM / SMS / Funds Transfer Fully customizable and operates on ISO standards. Multiple Connections / Multiple Formats. High speed routing. ( 350+ transactions per second ) Low cost of deployment © Craft Silicon.
The solution works on a standard Mobile phone ( Handheld ) and allows the MFI to provide following services online to their customers anywhere Open new customer accounts ( Use Mobile phone camera to capture and transmit the customer photograph ) Loan Application Authenticates the customer using his signature / photograph Savings Deposit Savings Withdrawal Loan repayment Loan Disbursement Balance Enquiry and Account Statements Group Transactions Mobile Top-ups Utility Payments Money Transfers ( Accounts / Non-Accounts ) Reports Reconciliation © Craft Silicon.
A bluetooth hand held printer Mobile phone with GPRS and Blue tooth connectivity. © Craft Silicon.
Mobile Phone Banking software do not have provision for customer authentication and the authentication mechanism will be based on Signature / photograph as in any conventional operations in a Bank / MFI. We show customer photograph and signature online from the core system over the air. © Craft Silicon.
Credit officer can post a transaction. Once the transaction is posted, a receipt is printed immediately on the Mobile printer. Phone and the printer is connected using the Blue tooth technology. © Craft Silicon.
Customer can apply for a loan. The loan product parameters and other information gets downloaded from the central server in online mode. Credit Officer can open a new customer account in the field. He can also take customer picture using the Phone Camera. Account will be opened. To activate the account, customer may have to visit the bank in order to sign the documents. © Craft Silicon.
AGENT MODEL A new way to serve your customers.
To understand this concept let us assume a case of a Micro Finance called Vision Micro Finance. Vision have about 50,000 active members spread across 15 Branches. Vision wants to reach more than 1 Million members and plan to have their services available in each and every corner of the country. Vision is planning to use their members to act as agents and server other Vision members. © Craft Silicon.
Product Definition 1. Based on criteria, Vision will give a loan to its member for 1,000 $ payable in 36 months. 2. Vision Agent is basically a Vision customer who owns a shop and is willing to provide services to other Vision Members. 3. This Member will be referred at Vision AGENT. 4. Member uses this loan to obtain the POS device which will be supplied by Vision. 5. The device will be used by members/Non-Members of Vision to perform transactions. 6. On every transaction that happens, AGENT gets some commission. This commission is credited to his account at the end of every day. © Craft Silicon.
Services OfferedCommission Structure Cash Deposit0.15 $ per transaction Cash Withdrawals0.15 $ per transaction Loan Repayments0.15 KSH per transaction Money Transfers ( Members / Members )0.8$ KSH per transaction Purchase Airtime - Mobile Operators generally give about 6% commission. Vision can share 3% with the Agent. 3% per top up Value Bill Payments – Service providers provide about 4% as Bill Collection commission. 2% per Bill Value Agent introduces a new member ( This is good for Vision MFI since it increases the number of members.) Terms and conditions apply. 2$ per member Vision will have to work out a PER TRANSACTION commission based on 1.When AGENT is making transactions on behalf of Vision, Vision will save on various costs including CASH handling. 2.Branches that are very small can be switched to AGENT model completely and the staff of those branches can move to a bigger branch. © Craft Silicon.
Agent Monthly ExpenseEstimated cost per Month POS LOAN Installment ( 36 Month Loan ) Once the loan is paid in full, this will be Agent Income 23$ GPRS Cost4$ Consumables ( Paper Rolls, etc )4$ Total31$ © Craft Silicon.
Transaction ( BREAKEVEN ) UnitsDaily IncomeMonthly Income @28 Day/Month Monthly Expense Monthly Profit General Transactions ( 0.15 $ Per Transaction ) – Breakeven 71.0730.15$31$ Air Time Sale ( 3% )2000.102.8 Total32.08311.08 Transaction ( GENERALLY ) UnitsDaily IncomeMonthly Income @28 Day/Month Monthly Expense Monthly Profit General Transactions ( 0.15 $ Per Transaction ) – Average 304.65129.2531$ Air Time Sale ( 3% )5000.246.5 Total135.7531105$ Based on our discussion with the managers at Vision Micro Finance, they mentioned that an Agent would perform a minimum of about 30 to 40 transactions per day. Agent transaction income is over and above his other income and it is likely to grow. © Craft Silicon.
Benefits to Agent Agent can generate some additional income. A Foot fall at the Agent shop for transactions can generate other business. ( Example if a member comes to withdraw at a Agent shop, there are chances that he would spend at the same shop for some purchase like milk, break, etc. Agent can capitalize on the Vision brand to promote his own business. Benefits to Vision Vision can serve members where it is not practical to open a full fledge branch. Setting up Agent Model is cheaper and it brings visibility at a less cost. If Agent model is well spread, it would attract more potential new customers. Easy to cover the whole country with a well thought agent model. Build customer loyalty. © Craft Silicon.
Transaction : Cash Deposit / Loan Repayments 1.System authenticates the AGENT 2.Agent receives the CASH. 3.System verifies that AGENT have sufficient FLOAT to receive CASH. 4.Receipt Printed 1.Customer Credit 2.Agent Float Debit 3.Customer Debit – Commission 4.Agent Credit – Commission ( Portion ) 5.Vision Credit – Commission ( Portion ) Transaction : Cash Withdrawal / Loan Disbursement 1.Customer Authenticates 2.Agent hands out CASH to the member. 3.Receipt Printed 1.Customer Debit 2.Agent Float Credit 3.Customer Debit – Commission 4.Agent Credit – Commission ( Portion ) 5.Vision Credit – Commission ( Portion ) © Craft Silicon.
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