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Role of IT in Islamic Microfinance by Waqas Shahid

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Role of IT in Islamic Microfinance by Waqas Shahid Powered By Docstoc
					           International Conference on
               Islamic Microfinance
           Organized By :




           CENTER OF ISLAMIC BANKING & ECNOMICS
Held At:
           Information Technology
as a tool in strengthen Islamic Microfinance
-Objectives
-Technology in support to IMF (Islamic Microfinance)
-Problem Areas in Manual Processing
-Models Representation
-Web application overview
It has been felt strongly to explore the relevance of
Islamic Financial Instruments for developing effective
Microfinance Instruments and functional framework for
Banks and NGOs. The need of the hour is to consolidate
the valuable efforts of the scholars and practitioners to
come up with a common understanding and agreed
upon model of Islamic Microfinance.
• Financing application from initiation to disbursement
is fully computerized & paperless
• Relevant customer info updated in system are
automatically populated into Credit System
• Web based configurable parameter driven Credit
system with fully integrated end to end workflows
• Online Decisioning (Approve/Reject/Return)
• Auto-SMS/ Email blast on the decision of application
• Credit information retained in the system
• New Customer Profile Creation
• Poor quality of financial data
• No aggregate record
 Problem area
 • New Customer Profile Creation
 Manual workflow                                                                              Improved workflow



                                                              Post all forms to Head Office
    Customer Profile form      Branch Manager Approval
    filled on paper in field
                                                                                              Customer Profile form            Manager Approval   SMS/Email all forms to Head
                                                                                              filled electronically in field                      Office




                                                                  Head Office enters
   Customer is approved!
                                                                  info to database
                                                                                              Customer is approved!

                                   Piles of extra paper and
                                   money gone to waste


Goals                                                Results
• Reduce costs                                       • Low labour cost
• Improve client data quality                        • Relative efficiency
Methods
• Simple web and mobile-phone application to record client data in field
• Data transmission via SMS/Email
• Automatic upload of data into database using a smart phone SMS-Server / Email-Server
 Problem area
 • Poor quality of financial data
 • No aggregate record
  Manual workflow                                              Improved workflow


   Annual auditing by Bank / NGO
                                   Book-keeping done locally                                    Copy of transaction record put
                                                                                                in drop-box
                                                               Admin updates records & prints
                                                               balances & dues




                                                                                                   Weekly collections
                                                               Annual auditing by Bank / NGO
                                    Weekly collections


Goals                                                 Methods
• Improve data quality & aggregate data               • Have an Accountant with a PC, serve a Federation
• Automate weekly accounting function                 • Charge nominal fee for data processing service
• Create sustainable business model                   • Use manual transport to ferry data back and forth
Results
• Weekly meeting time cut by half
• Instant evaluation of financial performance of large group of SHGs possible
•Donation Based Model

• Ethical Lending Model
$       $
    $
     Mobile
     Banking


               Credit /
                Debit
                card

Lender
                 Wire
               Transfer



     Western
      Union
$       $
    $
Alhuda HDA Connects
   people through lending to
alleviate poverty.
Thank You ……
Thank You




         CENTER OF ISLAMIC BANKING & ECNOMICS

 Head Office:
 192- Ahmad Block, New Garden Town , Lahore, Pakistan
 Ph: +92-42-35913096-8, 35858990, 38407850
 Fax: +92 -42-35913056
 E-mail : info@alhudacibe.com
 Web: http://www.alhudacibe.com