An Mfi Story Revisited

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The story of an MFI, and the issues it faces with its Information System..

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An Mfi Story Revisited

  1. 1. An MFI story.. Why Information Systems are crucial in the microfinance sector How Octopus attempts to address the related challenges © Octopus Microfinance 2009 Images by Bidulz.com
  2. 2. 2005, Omar, CEO Zagora MFI - Morocco © Octopus Microfinance 2009 flexible secured 1,4 M€ OLB
  3. 3. 2006 : growth … but © Octopus Microfinance 2009 2,4 M€ OLB 1,6 M€ OLB
  4. 4. Errors © Octopus Microfinance 2009 Too bad, these amounts have not been inputted in the correct cells We now believe that customer #12 has paid, whereas he hasn’t .. And customer #13 is now delinquent whereas he has actually paid !
  5. 5. Frauds © Octopus Microfinance 2009 This loan has been discretely inserted without following the standard appraisal process Money has been disbursed to someone we don’t know .. How many fake loans have we got now ??
  6. 6. Operating costs increase 2,4 M€ OLB 1,6 M€ OLB .. Extra staff to control and consolidate information
  7. 7. THE solution : A MIS ! © Octopus Microfinance 2009 Excel (2005) Flexible Secured & automated Excel (2006) MIS (2007)
  8. 8. Significant upfront investment... © Octopus Microfinance 2009 Argh, those software look very nice but they are so expensive! Yes, but this investment is necessary for your future development..
  9. 9. An 8 months marathon … © Octopus Microfinance 2009 Loan + Grant Requirements analysis RFP Configuration & Migration Software Proposals 1 M€ OLB 80 k€ IT Local IT expertise Technical Assistance
  10. 10. 2007 : still growing … but © OCTO Technology 2008 4,2 M€ OLB 2,8 M€ OLB 1 M€ OLB 1 M€ OLB
  11. 11. MIS doesn’t support our new local-currency products © Octopus Microfinance 2009 10 k€ € OLB DH OLB Never mind, I will manage the Dirham portfolio aside in Excel And I will ask to a local IT guy to develop an automatic bridge between the two Requirements analysis Development, Test & Migration
  12. 12. Can’t improve steering : breakdown rural/non rural © OCTO Technology 2008 I will ask my software provider to develop a specific patch for me! 10 k€ € OLB Requirements analysis Development, Test & Migration
  13. 13. Can’t improve operations : bulk collective repayments © OCTO Technology 2008 I will ask the local IT guy to develop this for me 10 k€ € OLB Requirements analysis Development, Test & Migration
  14. 14. Can’t change Accounting method © Octopus Microfinance 2009 The local IT guys says he can’t handle such a big change in the software ! We’ll have to wait for a new release from the Vendor…
  15. 15. Mid-2008 : Specific development is a dead end © OCTO Technology 2008 And my VAR now proposes a 70k€ shift to a new technical solution … € OLB DH OLB New release Won't work Won't work Won't work Local adaptations make the migration to the next Vendor version very difficult
  16. 16. Lost Eden … © OCTO Technology 2008 Flexible Secured & automated Excel (2005) Excel (2006) MIS (2007) MIS ? Is it impossible to streamline innovation while being secured & automated ?
  17. 17. MFIs are challenged with their MIS <ul><li>Many MFIs are using spreadsheet or manual systems: </li></ul><ul><ul><li>This is free </li></ul></ul><ul><ul><li>They can control the tool </li></ul></ul><ul><li>But it becomes quickly a clear limitation for growth: </li></ul><ul><ul><li>Errors </li></ul></ul><ul><ul><li>Difficult reporting </li></ul></ul><ul><ul><li>Frauds </li></ul></ul><ul><ul><li>Etc.. </li></ul></ul>© OCTO Technology 2008 Excel (2005) Flexible Secured & automated Excel (2006)
  18. 18. MFIs are challenged with their MIS <ul><li>The available software are often unsatisfactory: </li></ul><ul><li>Expensive : </li></ul><ul><ul><li>License </li></ul></ul><ul><ul><li>Technical assistance (often done remotely) </li></ul></ul><ul><li>Not agile/adaptable: </li></ul><ul><ul><li>When new features are needed, it takes a long time before it can eventually be integrated </li></ul></ul>© OCTO Technology 2008 $ Flexible Excel (2006) Secured & automated MIS (2007)
  19. 19. Octopus proposes a different model © OCTO Technology 2008 Costs Adaptability No license Only value-added services Cheaper local assistance Designed to be adaptable Develop adaptations for your clients IT partners Community Open Source platform
  20. 20. Octopus applies a continuous improvement process Need from the MFI Discussion and schedule with the Community Test-driven Development New release every 3 weeks Training/assistance to the final user
  21. 21. Other benefits <ul><li>MFI empowerment , not alienation </li></ul><ul><ul><li>Release every month , automated tests ensuring software stability </li></ul></ul><ul><ul><li>Open Source ensuring transparence & autonomy </li></ul></ul><ul><ul><li>Auto Update mechanism ensuring fast & secure release updates </li></ul></ul><ul><ul><li>Education of local teams ensuring technical alignment & quality </li></ul></ul><ul><li>Best practices aggregation </li></ul><ul><ul><li>Your best ideas aimed at maximizing social impact in one simple & robust product </li></ul></ul>© OCTO Technology 2008 Bulk repayments Partner remote offices Loan Officer roadmap optim PPI social impact reporting
  22. 22. A few other points to remember.. <ul><li>Don’t think static, think dynamic : things change fast (because of competition, growth, regulation), your MIS must change fast </li></ul><ul><ul><li>We consider the agility of Octopus as its main asset </li></ul></ul><ul><ul><li>Don’t buy a box or a list of features, build a team able to embrace the everlasting change </li></ul></ul><ul><li>MIS decay, the piece of code you write alone is your next year’s nightmare … choose a local IT partner who is certified by the Community </li></ul><ul><li>There is no license fees for Octopus, but you will certainly need to be accompanied … Octopus allows you to smooth your continuous investment in IT </li></ul>
  23. 23. © Octopus Microfinance 2009 WWW.OCTOPUSNETWORK.ORG

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