Management Information Systems in Indian Microfinance

This paper presents the results of a survey on the management information systems (MIS) of Indian MFIs. It highlights the importance of a high quality MIS for good performance. It proposes potential causes for Indian MFIs’ under investment in MIS and evaluates prospects for improvement.

The survey asked the top management of 11 major MFIs basic questions on MIS usage, expenditure on information technology (IT) and time required to complete various functions. Findings indicate that:

• Indian MFIs have low quality MIS despite being located in a country with readily available IT talent;
• Costs associated with using a low quality MIS significantly exceed the cost of upgrading to a higher quality MIS;
• MFIs with the most basic MIS in the study sample could reduce their overall annual cost per client by 38.1 Indian rupees by moving to an off the shelf MIS;
• Such an investment would pay off within two years.

The study reveals that lack of awareness is one of the key obstacles to MFIs’ adoption of MIS technology. It recommends a campaign to increase awareness and disseminate information on the benefits of MIS technology and successfully upgrading an MIS.