A management information system (MIS) is a system or process that provides information needed to manage organizations effectively. Management information systems are regarded to be a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy.
Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems. For any organization’s success, MIS plays key role.
An MIS is not simply a computer program, and it involves more than just calculating numbers. Information management is first and foremost people communicating with one another about events that affect the work of their organization. The chart of accounts, all the forms used by an institution—from receipts to loan applications to staff vacation requests—meetings, reports, policies and procedures, the staffing structure, job descriptions, the planning process, and, yes, the computer software—all these and more influence the flow of information in an institution and so, together, make up the management information system.
II. WHAT IS MICRO FINANCE?
Sometimes called “banking for the poor,” microfinance is an amazingly simple, proven idea that empowers very poor people around the world to pull themselves out of poverty. Relying on their traditional skills and entrepreneurial instincts, very poor people, mostly women, obtain small unsecured loans, usually less than $200, from local organizations called microfinance institutions, or MFIs. They use these loans to start, establish, sustain, or expand very small, self-sustaining businesses. For example, a woman may borrow $50 to buy chickens, so she can sell eggs. As the chickens multiply, she will have more eggs to sell. Soon she can sell the chicks. Each expansion pulls her further from the devastation of poverty. As each loan is repaid – usually within six months to a year – the money is recycled as another loan, thus multiplying the value of each dollar in defeating global poverty.
Microfinance has consistently proven to be one of the most effective strategies in the fight against global poverty. Today, microfinance institutions around the world reach a little more than 100 million people. But there are currently more than a billion people in the world living on less than two dollars a day. Clearly, microfinance has reached only a fraction of those most in need of financial services and still have a long way to go.
III. MIS in MFI’s
There is no doubt that “the right information” at “the right time” at “the right place”, is crucial in decisionmaking. Therefore, information and data is consideredamong the most valuable assets fundamental to thesuccess of an organization. The primary roles of the MISare to capture information, create new information, store information, and convey information to the user.
The two major objectives of MFIs are Outreach and Sustainability. MIS can add substantial value in achieving both the objectives.
· A major advantage of MIS is that it provides easy access to accurate and up-to-date information. For example, loan officers get information on loans that need follow-up, branch managers can monitor daily progress of the branch, and senior management can get a full picture of the portfolio performance and quality. Customers also get quick information on their accounts, payments and balances.
· Detailed information is captured on customers and their activities that can then be used to assess client business to assess impact. It is also useful in tracking historical information of clients.
· Activities, such as disbursements, repayments, deposits, withdrawals and money transfers are completed faster, better controlled and with minimum opportunity for errors.
· Information is produced in user-required formats, which facilitates better understanding, setting priorities, objectives and strategy.
· Key performance indicators provide an overview of the organization’s performance, efficiency and effectiveness of business procedures so that timely adjustments can be made.
· Use of MIS helps make MFI services more interactive, accessible and transparent.
· In terms of innovation, MIS provides full flexibility to structure products and services to the needs of its target group.
· Efficiency and productivity of staff is increased, as they are able to manage more products, customers, and transactions in less time.
· To meet target market needs, introduction of new products and setting procedures is easy and can be quickly applied throughout the branch network. It can also provide the flexibility to integrate with other applications and delivery mechanisms
IV. INFORMATION SYSTEM USED BY MFI.
The microfinance sector is also quite diverse in its use of information systems. Generally there are the following three types:
1. Manual System
Some MFIs still rely on manual systems, which involve maintenance of records in forms and ledgers. Organizations having manual systems are either small Micro-credit programs or NGOs.
2. Semi-automated System
More than 50% of MFIs are operating in a semi automated mode. Within this category, the spreadsheet is the common tool being used either in conjunction with a manual system or with an MIS application that does not fulfill the information requirements of the MFI. The majority of non-regulated MFIs have semi automated systems.
3. Fully Automated System
Few MFIs are fortunate enough to have a fully automated and integrated MIS fulfilling the whole information requirements of the organization. Such systems are existent with banks or regulated MFIs.
V. WHAT IS MIFOS?
Mifos is an industry-wide initiative to address the microfinance industry's information management challenge. Using the open source paradigm, it creates a new service model that will increase access to technology for all microfinance institutions, ultimately enabling them to extend their reach to the world’s poor. With Mifos, the microfinance industry as a whole not only benefits from the technology, it contributes to it, improves it, and owns it.
For MFIs, Mifos provides the flexible, cost-effective technology needed to extend your outreach to the poor. You will be able to select locally-based deployment and support specialists to assist with the implementation of Mifos and with maintenance support services. Without having to build your own system, you will gain a powerful, robust product, yet still benefit from greater control of the functionality. And with a global community contributing toward product maintenance, you will have confidence in the reliability, security, and support of the software.
VI. Why Open Source?
Mifos is open source technology with a freely available source code released under the Apache License Version 2.0 that can be downloaded through mifos.org. While Mifos provides cost-effective access to robust technology that can be modified and extended to meet an MFI's unique needs, the true value in Mifos is freedom - the freedom to scale through access to a robust and secure product, the freedom to contribute directly to the direction and quality of the product, the freedom to adapt Mifos to specific needs by incorporating add-ons and integrating new technologies, and the freedom to support and maintain Mifos for the full lifespan of your organization without being tied down to any one vendor for support or fear of the product no longer being developed.
A Powerful Accelerator Both the technical and business communities play an important part of the broad ecosystem around Mifos driving innovation to further the breadth of the platform along with facilitating widespread interest and adoption of Mifos. By harnessing and reinforcing the contributions of our community, open source can serve as a powerful accelerator to development, adoption, and innovation.
Development - The time and cost of developing and strengthening the core Mifos platform is reduced through the testing, QA, and feedback provided by the community along with the ability to utilize widely used open source libraries and the developers who are familiar with them.
Adoption - Driven by the network effects of community and the viral nature of open source, rapidly growing interest in Mifos can be met by an equally strong participation of a partner channel who can distribute Mifos with support and guidance from the community.
Innovation - Our community-driven approach fosters grass-roots innovation that can be taken to scale through the open modular architecture of our Mifos platform, enabling front and back-end technologies to help microfinance broaden its reach.
VII. Benefits of Open Source
- Participation: The entire microfinance industry and the broader technology ecosystem surrounding it have the freedom to suggest improvements, build new features & contribute new innovation to create a viable MIS platform for the entire sector.
- Quality: The entire industry has access to an MIS solution of greater quality and security through the thorough testing carried out by our global community of users and developers finding and fixing bugs and defects.
- Transparency: The openness of our approach including published roadmaps & design documentation, bug tracking systems, and open communication channels ensures the quality of our product and aids in the creation of industry-wide knowledge & best practices
- Adaptability - No matter your geographical or operational requirements, the openly available Mifos source code can be freely extended, configured, and localized to support your unique language, product mix, and regulatory needs.
- Collaboration: Through interactive tools on mifos.org and open communication channels like mailing lists and IRC, our community can support each other in the deployment and development of Mifos.
- Flexibility: With an extensible platform and the freedom to control your product and data, ensure that you won't be locked in to a technology you can't support that stifles your growth and doesn't fulfill your needs.
- Creativity: Fueling innovation at the local level, the community guides the creation of new products and technologies that extend the MFIs' reach to the poor.
- Longevity: Mifos is a constantly evolving technology that outlives the life of the vendor - both the core platform and innovation on top of it will be guided and actively maintained by the members of our community.
VIII. MIFOS AND ITS NEEDS.
Mifos is a web-based management information system (MIS) leveraging a centralized open source technology platform to provide microfinance institutions streamlined operations, real-time information, and the robust capacity to scale. The system provides the precision and agility needed to operate more efficiently and the business and social insight to drive broader and deeper outreach to the poor. As the core backbone of an MFIs operations it provides portfolio and transaction management, on-the-fly financial product creation, in-depth client management, integrated social performance measurement, and a reporting engine to provide financial transparency and business and social insight. Despite the remarkable impact of microfinance institutions around the world, there are still over 1.6 billion adults in need of financial services.
One of the factors inhibiting microfinance institutions from extending their reach is the lack of a flexible, cost-effective technology infrastructure that will allow them to expand their operations to provide loans to more people and to develop new products and services. Purpose-built for the microfinance industry, Mifos is a centralized management information system (MIS) platform featuring a user-friendly browser-based web interface running on top of a robust MySQL database.
Flexible to meet your unique operational requirements and scalable to meet your rapid growth and outreach, our centralized model enables real-time access to data across your organization from any web browser. All key functionality is met including client management, loan and savings portfolio management, transaction processing, and social and business reporting & analytics.
Guided by open source development and harnessing a widespread global technology community and in-region ecosystem of experts, this robust platform provides the precision to operate efficiently, the freedom to innovate, and the flexibility to extend new services that more effectively empower the poor.
Need for Mifos
There exist a number of off-the-shelf MIS (Management Information Systems) available today, however just half of all microfinance institutions around the world have implemented automated systems. The rest are still using Excel-based or manual systems to manage their portfolio and client information, severely hindering their efficiency and capacity to support growing numbers of clients. Those that do invest in technology spend duplicative resources on custom-built systems that are extremely costly and difficult to maintain.
Although regional differences and variations in financial models exist and must be accommodated in the automated information systems, a large portion of the functionality required is common to the vast majority of MFIs. This means that money is being spent by MFIs around the world to develop the same functionality over and over again – money that can be better spent to directly benefit the poor.
Mifos provides a solution to this problem. By building world-class microfinance software using open source technology, the common functionality in areas such as management and reporting can be standardized and shared by everyone. Innovations in microfinance technology can be scaled. Modifications can be developed in partnership with others in the microfinance world, rapidly increasing the ability of MFIs to extend their outreach to those in need.
IX. ADVANTAGES OF USING MIFOS
- Efficiency & Ease of Use - With unsurpassed ease of use and secure management of your portfolio, decrease the cost and length of your client acquisition cycle through streamlined business processes and increased loan officer productivity.
- Social & Business Impact – Through integrated social performance measurement with the Progress out of Poverty Index (PPI), monitor your clients rise from poverty and shape your offerings to truly deliver both social impact and business impact.
- Growth & Scalability – As a centralized web-enabled solution built on top of a MySQL database, rapidly open new branches and roll out new products and services instantly; all supported by a modern architecture with the robust capacity to scale to support 500,000s of clients.
- Transparency & Insight - Through real-time access to a consolidated view of your data and a powerful reporting engine, guide your strategy with business analytics and the transparency to satisfy external reporting requirements.
- Security & Data Integrity – Rest assured your priceless client data is secure from corruption and fraud through in-depth audit trails tracking all changes along with a granular role-based permissioning system.
- Flexibility & Agility – Proactively respond to competition and ever-changing client needs by rapidly innovating and creating new services through on-the-fly product definition, and the seamless connection to new technologies and broader financial networks delivered through our on-demand platform.
- Innovation & Evolution – Broaden your outreach and accelerate innovation by incorporating new front-end technologies and integrating with other systems and financial networks through our modern architecture on top of our common platform being developed and extended by our global community.
- Intimacy & Outreach – Capture deep client knowledge and deliver unique value-added services that help them rise out of poverty by mobilizing a field staff with a greater focus on customer interaction rather than data entry equipping them with client management tools like surveys