Microfinance is known for providing basic financial services to the poverty-stricken masses as well as neglected small business firms. Since it was started by Mr. Mohammad Yunus in Bangladesh, it has now spread across the globe for good. There are approx $180 billion has been awarded as microloan to the people of the whole world.
The demand for microcredit services (MFIs) is increasing, day by day. In this scenario, the industry had to be revamped and revitalized. Around 80% of the whole world population has no access to loans. Closing the gap is a humongous challenge for the finance industry itself.
Revolution in Microfinance with Software
But, the emergence of new technological innovations has made it possible in revamping the microfinance Industry. The special mention is the Microfinance Software that is helping MFIs in boosting their business prospects. But, how it’s able to do that? Let’s find out.
Automation in Microfinance
Modern software employs an automated system in the workforce. Automation has made it possible in providing the perfect business management tool to finance companies specially MFIs. They have such huge tasks as managing loan applications, underwriting, and approval, disbursals, setting up loan repayments, creating schedules, micro-savings, deposits, and many more.
Now imagine doing all these tasks manually. How much time and people are needed in accomplishing these jobs? If we try to calculate all the rates and interests by physical means, then there must be errors. But, automated Software for Microfinance can achieve the same within a very short amount of time. And there would be no errors.
Boost in Outreaching Capacity
MFIs are known for reaching far sides of the globe. They reach villages and remote areas in providing their services to the people, be it farmers, women, or small firms. The field agents of MFIs need to stay long in the field rather than in-office premises.
Advanced software for Microlending comes with mobile versions that boost the outreaching capacity of the MFIs. The agents can download and install the mobile applications and use them further in remote areas. They can utilize the app to process loan requests, repayments, deposits, and many more jobs. There are large numbers of people who are just waiting to take the opportunity of Microlending. With mobile microcredit applications, MFIs can reach them and provide them great benefits.
Growing the Microfinance Business
As of date, there are more than 10,000 Microfinance Companies are operating their business, worldwide. Not, all of them utilize advanced tools for operational management. Those who utilize Microlending software can expect growth up to 30%. From 2008 to 2017, this industry has witnessed a growth of 20-30% overall. We can bet that more than 90% of the organizations have cutting-edge software solutions.
We can provide you an example. In the last two decades, the number of MFIs is grown significantly in India. Many Microfinance Companies now turned into fully-fledged banking institutions like Bandhan, Arohan, Ujjivan Small finance, and many more. All these are possible because they have grown up to that advanced level.
Transforming Group Loans
The most significant loan model that we can find in Microfinance Industry is the Group Loans. People are arranged in the below-mentioned types of groups and given credits in India-like countries.
- Joint Liability Group (JLG),
- Self Help Group (SHG),
- Grameen Bank Model,
- Rural Cooperatives.
These types of unique models are not available in the banking systems. In managing these kinds of group loans, people need advanced management software. And MFIs are perfectly able to manage all kinds of group loans with the help of Online Microfinance Software in Kolkata-Mumbai-Delhi like premium cities in India.
Conclusion
When an industry grows, its supported trading also gets a boost. The same thing can be applied to the Microfinance Industry. On the one hand, MFIs are helping poor and unorganized entities all over the World. The software industry is also helping these MFIs to manage their business in better ways.
