IT and MIS in Microfinance Institution Effectiveness and Sustainability Issues

IT and MIS in Microfinance Institution Effectiveness and Sustainability Issues

S. Mohd. Najmullah Quadri, Vikas Kumar Singh, Kishen Parthasarathy Iyengar
Copyright: © 2011 |Pages: 21
DOI: 10.4018/978-1-61520-993-4.ch003
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Abstract

According to a recognized survey, only 11% of the world’s 240 million poorest families are currently served by Microfinance Institution (Daley-Harris, 2002). In order to increase the outreach of MFI, institution will have to go a step further and start their operation in the rural areas. Implementing sustainable IT infrastructure in such areas is a challenge with numerous obstacles. Further, employee training also poses challenges that are unique to the microfinance industry. In this chapter, we articulate some of the challenges faced by microfinance institutions and some potential solutions with the help of real world case studies. We also propose a framework, which will help microfinance institutions implement IT based management information systems effectively.
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Challenge I: Mfis Are Different From Commercial Banks

Microfinance is significantly different from Commercial and Retail banking in its approach and operational structure. Since Microfinance is a relatively new concept, as compared to commercial financing, very little attention has been given to its organization and structure. Furthermore, account officers working in MFIs are not that well trained in their realm, as compared to their counterparts in the banking sector.

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