an mfi story revisited

© Octopus Microfinance 2009

An MFI story..

Why Information Systems are crucial in the microfinance sectorHow Octopus attempts to address the related challenges

Images by Bidulz.com


2005, Omar, CEO Zagora MFI - Morocco

flexible

secured 1,4 M€ OLB


2006 : growth … but

2,4 M€ OLB

1,6 M€ OLB


Errors

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 !


FraudsThis 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 ??

Operating costs increase

2,4 M€ OLB

1,6 M€ OLB

.. Extra staff to control

and consolidate information


THE solution : A MIS !

Excel(2005)

Flexible

Secured & automated

Excel(2006)

MIS(2007)

Significant upfront investment...


Argh, those software look very nice but

they are so expensive!

Yes, but this investment is necessary for your future development..


An 8 months marathon …

Loan + Grant Requirements

analysis RFP Configuration & Migration

SoftwareProposals

1 M€ OLB80 k€ IT

Local ITexpertise

Technical Assistance

© OCTO Technology 2008

2007 : still growing … but

4,2 M€ OLB

2,8 M€ OLB

1 M€ OLB

1 M€ OLB


MIS doesn’t support our new local-currency products

€ OLB€ OLB

DH OLBDH 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

10 k€10 k€Requirements

analysis Development, Test & MigrationDevelopment, Test & Migration


Can’t improve steering : breakdown rural/non rural

€ OLB€ OLB

I will ask my software provider to develop a

specific patch for me!

Breakdown by Rural / Non Rural

Autres Amélioration continue des

processus

Changement & Dynamique

d'équipe

Ergo/IHM

MDM

Productivité des dévsSécurité

SOA




Can’t improve operations : bulk collective repayments

€ OLB€ OLB

I will ask the local IT guy to develop this

for me




Can’t change Accounting method

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…


Mid-2008 : Specific development is a dead end

€ OLB€ OLB

DH OLBDH OLB

New release

Local adaptations make the

migration to the next Vendor version very

difficult

And my VAR now proposes a 70k€ shift to a new technical solution

…


Lost Eden …

Flexible

Secured & automated

Excel(2005)Excel

(2006)

MIS(2007)

MIS ?

Is it impossible to streamline

innovation while being secured &

automated ?

MFIs are challenged with their MIS

Many MFIs are using spreadsheet or manual systems: This is free They can control the tool

But it becomes quickly a clear limitation for growth: Errors Difficult reporting Frauds Etc..


Excel(2005)

Flexible

Excel(2006)

Secured & automated

MFIs are challenged with their MIS

The available software are often unsatisfactory:

Expensive: License Technical assistance (often done

remotely)

Not agile/adaptable: When new features are needed, it

takes a long time before it can eventually be integrated


$

Fle

xibl

e

Excel(2006)

MIS(2007)

Secured & automated

Octopus proposes a different model


Costs Adaptability

No licenseOnly value-added

services

Cheaper local assistance

Designed to be

adaptable

Develop adaptations for

your clients

IT partners Community

Open Source platform

Octopus applies a continuous improvement process

Flexible

Secured & automated

MIS ?

Need from the MFI Discussion and schedule with the Community

Test-driven Development

New release every 3 weeks

Training/assistance to the final user


Other benefits

MFI empowerment, not alienation Release every month, automated tests ensuring software stability Open Source ensuring transparence & autonomy Auto Update mechanism ensuring fast & secure release updates Education of local teams ensuring technical alignment & quality

Best practices aggregation Your best ideas aimed at maximizing social impact in one simple &

robust product

Bulk repayments

Partner remote offices

Loan Officer roadmap optim

PPI social impact reporting

A few other points to remember..

Don’t think static, think dynamic : things change fast (because of competition, growth, regulation), your MIS must change fast We consider the agility of Octopus as its main asset Don’t buy a box or a list of features, build a team able to embrace the

everlasting change

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

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


WWW.OCTOPUSNETWORK.ORG

an mfi story revisited

Technology

errors octopus microfinance

frauds octopus microfinance

agility of octopus

secured automated mis

flexible excel

microfinance sector

local adaptations

mis doesnt