ICT as a Tool For MFI Growth

Slideshow Transcript

1. Slide 1: ICT: A TOOL FOR MFI GROWTH Saheed Okuboyejo
2. Slide 2: Highlight To Illustrate how Information and Communications Technology (ICT) can be a key component of your Growth Strategy
3. Slide 3: ICTs can significantly improve MFIs • Use of inward facing ICTs - MIS • Micro banker ,Bankers Realm MFO , MBS Esusu etc. • Microfinance Institutions become more competitive – Reduce transaction costs. How? – Increase transaction volume. – Decrease of interest rates. How? – Less Fraud. – Reduce Risk through Better governance. – Reduction in expensive premises. – Increased Outreach. – More Professional Look
4. Slide 4: ICTs can significantly improve MFIs • Outward facing ICTs – Mobile Phones, PDAs, ATMs, Internet • Poor people are better secured and improve their life conditions- How? – Have Access to better financial services – Reduce their over indebtness. – Faster loan processing using PDA. – Gain time because: No time to wait in line. – More Convenient Service; Access Anytime, Anywhere. – Increase Customer Satisfaction and Loyalty
5. Slide 5: ICT Program benefits an MFI
6. Slide 6: Management Information System (MIS) • Provides Computerized Data Processing for Management Decision Making • it is used primarily for – Loan Portfolio Management. – Accounting. – Financial Performance Management..
7. Slide 7: MIS Must Have ! • MIS can be used for: – Report generation and Financial Analysis (Loan Aging Report, Loan Basic Breakdown Report, Account Movement Report etc….). – Access control/security (i.e. passwords, audit trail) – Loan functionality (Managing your Loan portfolio, processing different types of loans with changing repayment schedules and interest rates) – Deposits functionality (compute daily deposits)
8. Slide 8: MBS Navision Esusu • The Esusu is a Microsoft Based Application. • Customised for the Nigerian Microfinance Industry by – Centre for Microenterprise Development – theSOFTtribe Limited – Ford Foundation
9. Slide 9: MBS Navision ESusu • User Friendly Interface • Provides Comprehensive Report • Provides interface for – ATM – Wireless Branching – SMS – Customise
10. Slide 10: ICT Technology - MIS • MIS is not a substitute for good management. • illusion that MIS can solve management issues – insufficient checks/controls/security, low staff morale, and operational/procedural inefficiencies • MIS may exacerbate problems by relying – incomplete or false data, – requiring staff to adapt to new systems – formalising a decision-making system lacking in requisite checks and balances.
11. Slide 11: Mobile Phone • 45 million phones in Nigeria • Nationwide coverage • Most Adopted Technology for market segment • Delivery channels include – Voice / SMS / GPRS – SMS Your Best Bet! – GPRS (General Packet Data Service) great potential
12. Slide 12: ICT Technology – Mobile Phone • Adopting Mobile phone as integral part of strategy??? – SIM & phone • Serves as ID – Use SMS as prime delivery channel – Preferential tariff from Network • Revenue source • Cost
13. Slide 13: ICT Technology – PDA • Hand held computers/ phones – Save staff time entering loan transactions twice: on paper and on PC – Improve Accuracy of Transaction Data – Allow Outfield Officer (Marketers) to access MIS when outside the office – Credit Scoring – Loan processing – Improved internal Control
14. Slide 14: ICT Technology – Smart Cards SIM Cards, ATM Cards, Digital TV Card, • Allow MFIs to build electronic database of clients’ profile and performance – MFI clients carry their related loan etc. information on a microchip – smart cards can act as a debit card, an account passbook and even a credit card. • Fraud: Reduce possibility of fraud by eliminating cash transactions and using more secure user identity and account information. • Satisfy the need of Nigerian clients for ID
15. Slide 15: ICT Technology – Smart Cards • High start up cost • Needs to be carefully weighed vis-à-vis – consumer acceptance – potential utility of the consumer info – automation of transactions may lead to weaker loan officer-client relationships
16. Slide 16: ICT Technology – others • ATM – Improve access but conflict with current strategy – Very High Cost • Internet & VOIP (Voice Over Internet) – Not adopted by target market – However can be very useful as an Inward ICT. – Can Reduce Internal Communication Cost – Can be very Effective for Bulk SMS
17. Slide 17: Incorporating ICT into Strategy • Be Realistic About What Technology Can Do – As with any tool, ICT also has limits. ICT is sometimes used as a panacea for deeper institutional problems – push for technology adoption by shareholders and consultants sometimes exceeds what is in fact practical. – sizable sunk cost, results in temptation to justify this through unrealistic projections
18. Slide 18: “ICT is a Vehicle which you drive and does not Drive You!”
19. Slide 19: Thank You