Micro Finance Institutions or MFIs, have a unique business model. They are usually not-for-profit organisations, yet are in a segment that has traditionally involved high margins. They provide financial relief to the poor, largely in rural areas, with the aim to alleviate poverty. They often pursue the important goal of enabling the poor to acquire skills so that they can earn a livelihood. MFIs typically consider their borrowers as members of the organisation and are often organised as cooperatives. MFIs normally deliver the following set of services to their members:
- Micro credit – Members are provided with loans ranging from $100 to $500 (INR 5000/- to INR 20000/-), based on their condition and qualification criteria.
- Savings Management – Members are given guidance on saving money so that they are able to repay the loans.
- Literacy, Skills and counselling – Members are given training in different crafts as well as general literacy so that they can break through the vicious cycle of illiteracy and poverty.
Many MFIs have begun offering additional financial service products like Insurance and Pensions. MFIs are faced with the task of maintaining accounts as well as a large number of member information. They need to monitor member activity and transaction records for the different financial products provided to members.
mPower from Milan Tally Services is a dedicated solution built on Tally.ERP9 for MFIs. It helps MFIs manage membership activities, micro-loan disbursements, interest and installments, repayments as well as loan rescheduling and default management. Further service products can be provided as add-ons in the solution, if required.
Benefits of mPower
- Quick and comprehensive assessment of borrowers enabling faster recruitment of members.
- Management of member meetings and interactions help improve service delivery.
- Automated entries reduce staff time in data entry and also improve accuracy.
- Helps faster service delivery gaining customer loyalty.
- MIS reports that warn of doubtful debts and defaults improving debt collection.
- Reduced cycle time for loan recovery, thereby reducing recovery costs.
- Ability to sell extended products range and Loan repayments.
The solution integrates with specific SMS services and handheld printer devices.