Management Information Systems (MIS) for Microfinance

This paper argues that information and communication technology (ICT) can be a strategic tool in making MFIs more efficient and effective.

It states that:

• MFIs can reach more people in a more economic way by implementing the right management information system (MIS);
• While a large number of MFIs are making good use of technology, the majority are facing difficulties in getting the right solution because of:
  • Insufficient organizational and human capacity;
  • Unavailability of suitable MIS applications for microfinance;
  • Diversity in business processes;
  • Diversity of geography and language;
  • Unavailability of vendors to implement and support ICT solutions;
  • High cost of ICT solutions for MFIs.
• The back-office MIS is the backbone of any information system solution;
• MFIs need to have a strong back-office MIS before attempting to deploy any advanced front-end applications or delivery channels.

The author concludes that:

• Innovations in ICT have transformed traditional approaches to microfinance, facilitating growth and reducing cost;
• Some players have already started benefiting by using MIS and similar ICT solutions, but the majority of the MFIs have yet to realize the importance of its use to achieve outreach and sustainability;
• CGAP's information system support is a prudent initiative to assist MFIs in getting access to ICT;
• Renewed efforts are required from all the stakeholders to overcome the challenges faced by the microfinance industry in taking on ICT.