Computerized MIS Systems for Microfinance

Regional Workshop, East Asia and the Pacific

Manila, PhilippinesShirley A. Lunde salunde@usa.net

An Information SYSTEM for MFIs

Loan Portfolio

Accounts Payable

Report Writers

andFinancial Analysis

Tools

Security and System Administration

Savings

General Ledger / Financial Stmnts / Banking

Operating System and Development Language

The Blind Men and the Elephant

“ It was six men of

Indostan

To learning much

inclined

Who went to see the

Elephant

(Though all of them

were blind)

That each by

observation

Might satisfy his

mind. ”

MIS System

One, approaching the tusk, cried. . .

“ To me

‘tis

mighty

clear

This

wonder

of an

Elephant

Is very

like

a spear!

”

General Ledger

Another seized upon the tail. . .

Loan Portfolio

“ I see

the

Elephan

t

Is very

like

a rope!

”

Yet another felt about the knee. . .

Savings “ ‘Tis clear

enough

the Elephant

Is very like a

tree! ”

“ And so these men of Indostan

Disputed loud and long. . .

Though each was partly in the

right,

And all were in the wrong! ”

The Moral of the Story:You can’t draw accurate conclusions based on limited information. Here, each man’s conclusion was correct, based on the information available. Yet his understanding of the whole was very wrong.

The Solution: IntegrationAll elements of the system

work together; communicate with each

other.

Accounting Applications / GL and AP

Accounting Applications [GL, AP]Optimal Chart of

Accounts Flexible, allows for growth and

multi-sector analysis Promotes financial analysisTransactions: history, balances,

audit trail Flexible financial statement generatorCentralized bank reconciliation facilityForeign currency processing

Loan Portfolio

Loan Portfolio Application

Automate loan processing cycle

Enter and validate / Approve / Disburse / Cancel / Pay / Adjust or Reschedule / Write Off / Pay OffRisk and performance

analysis Portfolio reporting and calculation of

indicators

Monitor on-lending and Internal Account / Group Fund activity

Credit Product performance analysisIntegrated socioeconomic impact database

Savings

Savings ApplicationSavings transactions

Forced Savings, with integration from Loan Portfolio

Voluntary Savings Savings-based Income /

Investments Teller OperationsSavings product

analysis

Possible Levels of Integration

Shared master files

Common Chart of Accounts file

Manual GL entries based on summary reports from subsidiary applications

Transaction-level integration

Transactions processed in one application update data throughout the system

Master files are shared, where appropriate

No integration

Most

Least

Benefits of Integrated Software

Eliminate redundant data entry, minimizing workload to:

Speed delivery of services Enhance capacity and efficiency, and

facilitate growth

Ensure data integirity among applications and enhance the quality of management information

Minimize training with a common user interfaceShare security profiles and system administration functions

General System Requirements

Lifecycle costs Software Installation and training Modifications /

Enhancements / Support

Usability / User productivityFeature set (cost/benefit)

Requirements matrix, with weighting by importance

Expectations: 90% not 100%