An Mfi Story Revisited
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Transcript of An Mfi Story Revisited
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© 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
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© Octopus Microfinance 2009
2005, Omar, CEO Zagora MFI - Morocco
flexible
secured 1,4 M€ OLB
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© Octopus Microfinance 2009
2006 : growth … but
2,4 M€ OLB
1,6 M€ OLB
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© Octopus Microfinance 2009
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 !
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© Octopus Microfinance 2009
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 ??
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Operating costs increase
2,4 M€ OLB
1,6 M€ OLB
.. Extra staff to control
and consolidate information
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© Octopus Microfinance 2009
THE solution : A MIS !
Excel(2005)
Flexible
Secured & automated
Excel(2006)
MIS(2007)
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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..
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© Octopus Microfinance 2009
An 8 months marathon …
Loan + Grant Requirements
analysis RFP Configuration & Migration
SoftwareProposals
1 M€ OLB80 k€ IT
Local ITexpertise
Technical Assistance
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© OCTO Technology 2008
2007 : still growing … but
4,2 M€ OLB
2,8 M€ OLB
1 M€ OLB
1 M€ OLB
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© Octopus Microfinance 2009
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
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© OCTO Technology 2008
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
10 k€10 k€Requirements
analysis Development, Test & MigrationDevelopment, Test & Migration
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© OCTO Technology 2008
Can’t improve operations : bulk collective repayments
€ OLB€ OLB
I will ask the local IT guy to develop this
for me
10 k€10 k€Requirements
analysis Development, Test & MigrationDevelopment, Test & Migration
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© Octopus Microfinance 2009
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…
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© OCTO Technology 2008
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
…
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© OCTO Technology 2008
Lost Eden …
Flexible
Secured & automated
Excel(2005)Excel
(2006)
MIS(2007)
MIS ?
Is it impossible to streamline
innovation while being secured &
automated ?
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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..
© OCTO Technology 2008
Excel(2005)
Flexible
Excel(2006)
Secured & automated
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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
© OCTO Technology 2008
$
Fle
xibl
e
Excel(2006)
MIS(2007)
Secured & automated
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Octopus proposes a different model
© OCTO Technology 2008
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
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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
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© OCTO Technology 2008
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
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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
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© Octopus Microfinance 2009
WWW.OCTOPUSNETWORK.ORG