Adopting Technology to Improve Microfinance Efficiency

By: Bea Arnela Parungo

RAFI Microfinance (RMF) has constantly been revolutionizing their operations through breakthrough innovations. Last April, RMF upgraded its Management Information System (MIS) to improve efficiency in operations. On-field account management and record-keeping using the mobile application eliminates redundancies and reduces total work load. Instead of recording in collection sheets, the field staff encodes the data directly on the application thus updating the system automatically over the internet. Previously, the field staff has to fill out the collection sheet and upon arrival in the branch; the support staff would input the data on the system. Most microfinance institutions have this same practice.

RMF’s new MIS encourages client interaction. Clients receive a system-generated SMS for every payment-related transaction. This notification gives assurance to the clients by informing them that their payment was received and correctly recorded. An SMS-based customer care group monitors all the incoming and outgoing text messages. This SMS system also lets the members send inquiries and complaints if there is any discrepancy in the payment made and the amount recorded in the system. At times, RMF clients even send thank you messages and express appreciation for the SMS notifications. All the feedback received by the customer care group are consolidated and forwarded to the branches regularly.

Aside from improved operations efficiency and better customer service, the system also serves as an internal control measure. The system limits the chances and opportunities for fraudulent activities. At any time, the branches and the main office can generate real-time operation reports. Furthermore, the client will be notified if there is an error in recording their payment. If a payment is not encoded in the system, the client will not receive a payment confirmation message. All clients are required to have a mobile number on file and they are well-informed about the SMS notification efforts. So far, there are no loopholes identified in this new system.

Before rolling out the new MIS, RMF setup a transition plan. Information and promotional materials were prepared. Training courses and forums were conducted. Communication procedures were also delivered to inform the clients of the changes that will affect them. Every now and then, e-mail blasts are sent to the staff for system-related updates and reminders.

Implementing an MIS upgrade to all of RMF’s 23 branches was not an easy journey. As with any other endeavors that entail change, one of the major challenges was dealing with resistance. According to Mr. Edwin T. Marfil, RAFI’s IT Manager, his team made sure not only to highlight the benefits of the new system but more importantly to make everyone fully understand how the new system works. Internet connection is also another concern since the system is an internet-based program. Some of RMF’s areas of operation have very poor internet signal. The field staff then may use the offline mode feature of the mobile application. Once back in the branch or anywhere with a stable internet connection, the data saved offline will then sync on the server.

Purchasing a first of its kind MIS system in the country, the mobile devices of the field staff, and establishing a support infrastructure for this new MIS all come at a cost. In addition, the IT Team remotely monitors the operations from the main server. There is also a data back-up mechanism and regular and preventive maintenance costs to keep the system up and running. When asked about the expenses involved in adopting a new MIS, Mr Marfil said that the great benefits of using the new MIS outweigh the costs. “In the long run, it is more expensive to lose clients.” he added.

RAFI is very progressive in terms of technology. Mr. Marfil pointed out choosing the proper technology platform as a key to effectively support operations. Collaboration between the IT Team and the RMF Team together with the full support of the top management made this innovation possible. RAFI aims to continuously improve their operations and find ways to serve their clients better.