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

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

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

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 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

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

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

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

 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

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

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

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.

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

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

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

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

Thank You..