2. Presentation by Pushpraj Agrawal (07305011) Rupsha Banerjee (06808011)

3.  Overview of why Bangladesh is a success o Technology was social o Built strong enforcement structures o Is now building new technologies using IT for better contacts with borrowers and monitoring repayments  MF has an outreach of 48 million poor in Asia  2005 was declared as the year of Microcredit by the UN  Has two models of lending o Group Lending o Individual Lending

4.  Has been seen as a successful interventionist strategy in rural India  Yet to take off in a big way in urban India Data source: NCAER 18%37% 26%4% 16% FormalSemi – FormalInformal 1-on-1 personal Banks, Insurance co.s Microfinance Institutions Employers, relatives, neighbors. friends Moneylenders, pvt financiers Informal mutual (Chit funds )

5.  High growth  India: $4 million lent (1995-96) to >$2.8 billion (2006-07)  High potential growth  India: Market size estimated at $16-22 billion  Large outreach  India: >33 million Housholds  Large number of players  India: >3000 MFIs Source: MSR India 2007

6. Main Areas of Intervention in Management of MF  Introduction of adequate risk management Tools  Reduce operational costs with automation  Deploy the above with low cost & wide access technology

7. Risk Management Tools Streamlines the lending process and lower costs o Reduces time and manual steps in processing each application o Reduces number of applications needing manual review o Reduces training time for new credit staff o Improve loan officer efficiency (reduce time spent on collections, which in some markets claim up to 50% of loan officers’ time)‏ o Increase lending volume o Approve 10-30% more applications keeping loss rate unchanged o Enables risk-based pricing Better quantified expected losses for different risk classes of borrowers Credit Scoring A method by which data are used to predict a particular outcome of interest. The score represents an estimate of the probability or odds of an event occurring, such as the probability of default.

8. Role of ICT  Management Information Systems (MIS)‏  Mobile Computing  Branch Office Franchise model  Card Services, EFTPOS and ATM's  Internet Banking

10. Management Information Systems  For the Microfinance Providers (MFP)  To monitor the quality, sustainability and efficiency of its loan portfolio,  To monitor development impact,  To manage general administrative tasks...Grows with the institution

11. Colour outside the lines Present MIS...Grows with the institution

12.  Has its roots at the "Uganda Women's Finance Trust" where it was initially developed as the "Trust Information System“  Took 3 years to develop from 1995-98  Affordable entry price (free below 500 portfolios)  Best suited for small and medium MFIs (5,000 – 20,000 loan portfolios and upto 1,00,000 savings portfolios) ™ Windows 2000/XP compatible ™ Minimum Requirements: 64 MB Ram, 800x600 screen resolution, A4 printer.

13. General Ledger All Financial Statements BudgetingAssets Sales & Purchases Export to Other Export to Other Accounting Packages Foxfire Report Generator Client Handling Individual Clients Businesses BusinessesGroups Group Members Savings 100 Savings Products Time-Deposits Loan Portfolio Tracking of Group Accounts Linked to Savings or Shares Printing of Loan Contracts

14. o Flexibility o User friendly o Can be easily customized o Affordable Is multilingual o English, o French o Spanish Strategy adopted while creation LPF

15. It can generate reports for both individual and group borrowers along with repayment schedules

16.  Automatic booking of standard transactions.  Generates Reports on : o Budget Tracking o Quarterly Performance o Profit per Period/Surplus o Cash Flow o Trial Balance o P&L Statements o Balance Sheets

17. Allows for creation of your own reports which is generated through FoxPro

18. mifos: The Open Source Proposal...a Grameen Foundation Initiative  A freely available world-class management information system (MIS)‏  Provides the core functionality required by microfinance institutions.  The flexibility and scalability of the product means that we'll be o able to simultaneously standardize common processes o accommodate regional variations o scale for new innovations in the future

19. ...cont Total 5 deployments:  Grameen Koota - India  ENDA - Tunisia  Jitegemea - Kenya  Fundación Adelante - Honduras  IIRM - India mifos: The Open Source Proposal Grameen Koota - Bangalore, India Mifos Specialist : MFTech Project Champion: Suresh K. Krishna Project Manager: Naganand Kumar Mifos Specialists: MFTech and IBM Number of clients: >100,000 Number of branches: 44 Status: all branches live Implementation Status * Total Branches -- 44 * Running live in centralised server -- 27 * Running MIFOS locally -- 17

20. IIRM (Institute for Integrated Resource Management) - Tezpur, India Project Champion: Dhattatreya Hosagrahar Project Manager: Noel Anil Mifos Specialist: Profound Infotech Number of clients: >7,000 Number of branches: 6 Status: Deployment now underway...cont mifos: The Open Source Proposal

21. Mobile Banking WIZZIT (South Africa)‏ M-Pesa (Kenya)‏ ICICI (India)‏ “The large scale spread of mobile telephony has opened up new vistas for banking in the form of mobile banking and the potential in this new sphere is enormous; adequate steps to ensure safety and security in a mobile based computing / communicating environment have to, however, be made.” RBI’s Financial Sector Technology Vision: 2008-2010

22. o “A bank in your pocket“ o “The easy way to pay“ o No minimum balance requirement o Variable monthly fees o Pay as you go model o Markets via WIZZ-Kids WIZZIT study

23. References www.cgap.org http://www.microfinancegateway.org/resource_centers/techn ology/iss_software/?iss_orderby=rating http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROG RAMS/FSLP/0,,contentMDK:21368529~pagePK:64156158~piP K:64152884~theSitePK:461005,00.html http://www.loanperformer.com/ http://www.mifos.org/about/open-source-technology

24. Thank You