Cost implications for Technology to MFIs

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Cost implications for Technology to MFIs
BASIX August 2008
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Benefits of Technology

• 100 Automation of all Business/ functional areas
  
• Integrity between operations modules to Financial
  accounting
• High Data security
• Flexible Loan/Savings/Insurance product
  definitions and its revisions
• Automated Loan Documentations
• Tools for controlling and effective monitoring
• Various MIS reports for analysis from field level
  to top Management.

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Key Elements for Selection of Technology

• Buy Readymade Software with and with out
  customization
• In-house Development
• Service model

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Buy Readymade Software with and with out
customization

• Pros
• Faster to Implement
• Reduce IT Resources
• Domain Specialist not required
• Cheaper than in-house development
• Functional tested software
• No access to data by third party

• Cons
• Cost increase due to Customization
• Need to Depend on IT Vendor
• Dependence on after sales service

Reliable IT provider Key to MFI Success
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In House Development

• Pros
• Ownership of Software
• Hues customization is possible as per
  organization need.

• Cons
• Development cost is high
• Retaining IT staff is difficult
• Difficulty to maintain source codes
• Costlier than ready made software

• Pros
• Ownership of Software
• High customization is possible as per the need
  of organization
• Need not depend on outside IT agency
• No access to data by third party

Small/ Medium MFI need to focus on core Business
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Service model

• Pros
• Pay as per usage of Services
• Lesser cost in initial stages
• Cheaper than Readymade / In-house software

• Cons
• In long run, might prove costly
• Connectivity is an issue
• Model is still evolving
• Dependence on service provider
• Third party have access to data

Work with Financial Discipline
Work with Financial Discipline
Model is evolving, MFIs can undertake pilots
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Our suggestions

• Assess your Technology needs
• Initiate the process
• Select right IT partner
• Adopt IT in your business
• Increase your customer reach...

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Thank You
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