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Management Information system- Microfinance overview

Good information system is very important tool for managing Microfinance institution successfully. Whether by hand or by computer, MFIs hold and maintain large amount of important business data from basic client information to detailed analyses of portfolio statistics. This data must be stored, processed and clearly presented so that MFI boards and managers can make sound decisions. A good information system should do just that, it should act as a conduit through which raw data become useful and useable information.

Management Information system is the series of processes and actions involved in capturing raw data, processing the data into usable information, and disseminating the information to users in the form needed. All the policies, procedures and practices that direct an organization’s operations and the staff that interact with the information, combined with the software and hardware, comprise an information system. Every MFI has some system for tracking their loans and operating expense information. Many small organizations use manual systems with paper and pen. Others may use a spread sheet, such as MS excel, or similar desktop application for tracking loans and off-the-shelf accounting package for producing reports. Whatever the method, when MFI is no longer able to provide quality loan data in a timely and cost effective manner, it is time to consider something more automated or sophisticated such as core systems and other additional systems.

Having good information system is essential for an institution to perform efficiently and effectively. “The better an institutional information system, the better it can manage its resources”. In a competitive environment the institution with better information has a distinct advantage. In order to have good information, MFI are advised to combine both core systems and additional systems that would help them to generate the information they need.

Core systems would enable MFIs to perform daily core operations, such as loan portfolio management, accounting functions, managerial and financial reporting.

Other integrated systems would allow MFI to provide clients with faster service and convenience, enable MFI to increase outreach with a fraction of the cost of traditional channel, to provide convenience to clients, and to better meet its institutional goals. Tools such as customer relation management systems and mobile solutions allow MFI to automate aspects of the loan application process, including data gathering, analysis, storage, underwriting, collections and security that would ultimately lead to cost saving. With these tool, loan officers can monitor, change and improve process flows on the fly through a graphical interface and take on more clients as a result of less time spent on the credit process per individual.

Other benefits from good management information system is that, it can revolutionize the work of field staff, enabling supervisors to better monitor the work under their responsibility, provide better guidance to their staff, and pinpoint the areas that requires more attention. As more and more microfinance institutions scale up their activities, managers are becoming increasingly aware of the need to improve their information systems.

On the contrary, institutions that do not implement good information systems, in most cases they would experience unnecessary losses from business operations, low growth, lack of flexibility, lack of good reporting, and high costs of operations. Cost of installing management information system may be high but cost of operating without management information system is higher.

Amala Core Banking is an information system that has helped many Microfinances on managing their businesses. With Amala Core Banking and its mobile apps, they are able to get the reports on time, easy follow ups of their clients on the repayments and provide better services to their clients.

For more information, please visit our website www.amala.co.tz or Email us through huduma@singo.africa or call us at +255 76 652 1258.

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