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Leveraging ICT for Micro-finance. Subodh Gupta Safal Solutions Pvt Ltd. Outline. Deterrents in scaling up of Micro-finance Leveraging ICT to reduce deterrents Automation in MFIs & LPOs SaralMAP – Case I SafalPACS – Case II BASIX ITSL: Sudama Card – Case - III Learning.

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Leveraging ICT for Micro-finance

Subodh Gupta

Safal Solutions Pvt Ltd

System Automation in Finance and Livelihood


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Outline

  • Deterrents in scaling up of Micro-finance

  • Leveraging ICT to reduce deterrents

  • Automation in MFIs & LPOs

    • SaralMAP – Case I

    • SafalPACS – Case II

    • BASIX ITSL: Sudama Card – Case - III

  • Learning

Systems Automation in Finance and Livelihood


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Deterrents in scaling up of Micro-finance

  • Thinly spread out operations

  • Smaller size of operations

  • Higher transaction cost

  • Multiple models of Micro-finance

  • Higher risk in agriculture loan

  • Clients often illiterate, socially and economically disadvantaged

Systems Automation in Finance and Livelihood


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Leveraging ICT applications to reduce deterrents

  • Use of automation in capturing, transferring and processing of transactions

  • MIS to meet timely information needs of the management, governance and the customers

  • Development of flexible financial products combining saving, lending and insurance that meet the requirement of customers and also reduce the cost of transaction

  • Automation of retailing of financial services of multiple providers through single delivery point

Systems Automation in Finance and Livelihood


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SaralMAP PRADAN – Case I

  • PRADAN is a Livelihood Promoting Organization (LPO) and operates through 19 teams and 3 support cells spread over 7 states.

  • PRADAN wishes to monitor 150 indicators of SHG promotion, Livelihood promotions and Infrastructure creations

  • Data comes in Excel sheet from 22 teams and is then manually aggregated into master excel sheet

Systems Automation in Finance and Livelihood


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Continued

  • Problems with the existing systems

    • Human errors while entering data again and again

    • Problems in tallying numbers

    • Data of many indicators not reported

    • Valuable time of meetings spent in correcting the data

    • Use of names differently – Chaibasa some times called West Singhbhum

Systems Automation in Finance and Livelihood


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Continued

  • SaralMAP – an affordable solutions for PRADAN

    • Six data panes designed after system understanding and discussion with PRADAN senior staff. They capture 60 indicators.

    • It has a data entry module at the team level these data can be updated periodically. It generates one excel sheet to be sent to HO

    • There is data consolidation module that consolidates these 60 indicators

    • SaralMAP is ready with the data for the meetings

    • It also provides online analytical tools for min, max, average, standard deviation

Systems Automation in Finance and Livelihood


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SafalPACS – Case II

  • District Central Cooperative Bank, Bidar has 171 PACS. Average accounts a PACS handles is 800-1000. All the books are maintained by CEO of PACS manually

  • PACS delivers Kishan Credit Card loan, SHG and BDP loans. It also provides fertilizers and grocery items like wheat, sugar and K oil.

  • All the problems of manually maintained accounts – time spent in correcting, reports not ready on time etc

Systems Automation in Finance and Livelihood


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Balance sheet

P&L

Trail Balance

Ledger

Vouchers

Case II Operation Diagram

Down load data

When needed

On dial up line

SafalPACS

@ DCCB

Branch

All financial transactions

SafalPACS

@ PACS

Systems Automation in Finance and Livelihood


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Case II continued

  • SafalPACS is a package where there are two sets of software – one sits on iStation a hand held device and the second sits on a PC located in the Bank branch of DCCB.

  • Day to day transactions are entered online on iStation and monthly balance sheet, P&L, Stock book are printed in the PACS

  • For SHG, Digitized Demand information (DIDI) sheet is printed and updated at PACS level

  • Depending on transactions, data is transferred on dial up line to DCCB branch PC.

Systems Automation in Finance and Livelihood


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Case II continued

  • Advantages of SafalPACS

    • Affordable solutions for automation at PACS level

    • Low power and low maintenance requirement and low bandwidth, Hence one need not wait for long

    • Advantage of automation – timely reports, elimination of human error

Systems Automation in Finance and Livelihood


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BASIX ITSL: Sudama Card- Case III

  • Objective: Delivering credit to the poorest in commercially viable way

  • PCO booth operator is authorized to deliver credit as per a guideline and capture the transactions through a card reader and a smart card named as Sudama card of the borrower

Systems Automation in Finance and Livelihood


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BPA Bank

Account

FAMIS2000

Update Server

Sudama Server

Card fees

Repayment

Loan Definition

Approval

BASIXPOT

Sudama Card

Disburse Loan

Case III Operational model

Systems Automation in Finance and Livelihood


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Case III continued

  • Advantages –

    • Delivery channel cost is reduced and capacity of the channel enhanced

    • Reduced the cost of transaction

    • Creates platform for delivering innovative financial products combining credit, deposit and insurance

Systems Automation in Finance and Livelihood


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Learning and Conclusion

  • Making of micro modules and loading them on thin devices that needs less power, less maintenance and low bandwidth

  • Develop innovative financial products combining deposit, credit and insurance for better margin

  • Automation for retailing the financial services through PCO booth has more relevance in future

  • Braking of the processes and braking down the technology provide the right mix for micro finance recipe

Systems Automation in Finance and Livelihood


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Thank You

Feedback to

Info@safalsolutions.com

System Automation in Finance and Livelihood