Ed Cable is the Mifos Community Manager – he oversees the Mifos open source community, connecting its members worldwide with the tools, support, and engagement needed to successfully create a world of 3 Billion Maries.  He works to ensure that users can smoothly implement Mifos, local support providers can find MFIs in need of support, and volunteer contributors can successfully contribute their talents to building software that ends poverty.

Technology – its value can come in many ways

I’m happy to see Nuru is investing in technology and aiming to maximize its value. Both mobile banking and cloud-based computing are two exciting technologies that have great potential to dramatically shape how microfinance can have a transformational impact on poverty alleviation.

We could spend days talking about cloud computing or mobile banking individually; M-PESA, the most successful mobile banking platform that has paved the way for other platforms, won the Mobile Money for the Unbanked Award at the 2011 Mobile World in Congress in Barcelona (if you want to learn more about branchless banking worldwide, CGAP just published a great database of branchless banking platforms).  Today I want to focus on bringing these technologies together and the many points of value it could provide.  Throughout the many phone calls I’ve shared with Vivian as Nuru has rolled out Mifos and M-PESA, I’ve seen that they are investing in technology very holistically.  Nuru is focusing on sound operational processes, implementing a functional back-end system (Mifos), and integrating the back-end with front-end technologies for reaching out into the field (mobiles and M-PESA).

Mifos is what powers the back office; it’s the core system that runs the day-to-day operations of the CED program.  The front office consists of the collection and disbursal of loans and savings accounts – all the transactions that must get processed in the back office. M-PESA, by enabling these transactions through the mobile phone, streamlines this process.  With the newly developed integration between Mifos and M-PESA, just a few simple steps, means all these transactions are automatically recorded in Mifos, smoothly bridging the front office with the back office.


Nuru is essentially running a bank without all the bricks and mortar infrastructure – they still need the IT infrastructure to keep things rolling smoothly.  That’s where Mifos comes in; think of trying to run a bank with nearly 2,000 clients all manually via paper and Excel. Nuru was managing their clients and processing thousands of payment transactions through paper ledgers, paper surveys, and Excel workbooks.  Now with Mifos, all those transactions take place online; all the information they need to provide their services is available real-time anywhere there’s an internet connection – through a mobile phone, on a laptop, in the Nuru Kenya office, back at headquarters in the US, from an internet cafe…


While mobile banking has been incredibly successful in Kenya, it still has many challenges for it to scale. One of these is making sure all the transactions taking place in the front office (the mobile phone) show up on the back-end (the MIS). Right now, most MFIs have to manually enter the transactions that occur on the phone into their back office system.  You can imagine that this process wastes a lot of time and is prone to a lot of error. Now that Mifos is integrated with M-PESA all Nuru need do is download the day’s M-PESA transactions, and upload that spreadsheet into Mifos. With a couple of clicks, all payments are reconciled with each client with not a paper in sight.

For each Mifos user, we aim to show the impact of technology on scaling the growth and impact of microfinance.  Measuring the value of technology is an exciting and intriguing journey that leads to the discovery of many ways technology can infuse value in the delivery of financial services to the poor. Across all of our users, we’ve seen value in many forms.  In India, for some of our larger users – the most significant ROI has been through greater efficiency and cost savings.  Reducing the time to enter transactions, introduce a new product, or open a new branch has made field staff more productive, reduced the costs of expanding service, and allowed them to significantly grow to provide more affordable products to the poor. For other users, the greatest benefits have come through the increased flexibility Mifos provides and better day-to-day management that access to historical data allows.

With Nuru and our other Mifos users in Kenya, this will be the first chance for us to see the value of not only the Mifos technology, but the integration with mobile banking. I’m excited to see what’s in store:

  • Greater efficiency and more productive staff: The time of Field Officers is precious. By reducing paperwork and data entry through automation and enabling automatic payments and disbursals via mobile phones, Field Officers are able to focus on helping their savings groups thrive. They spend less time collecting payments and more time providing advice and bringing on new clients.
  • Expansion to new sub-locations: The ease of branchless banking, the far reach of mobile data connection, and the low cost of open-source web-based software will allow Nuru to expand well beyond typical bricks and mortar organizations to rural areas of extreme poverty where financial services are needed the most.
  • Accuracy, Risk Management, and Visibility: Nuru will be able to manage their portfolio with lower risk through less manual data entry and one centralized source of data. They can ensure greater accuracy and integrity of data and identify potential default or other problems before they occur. Nuru can more proactively react to portfolio at risk and help clients begin to pay off their loans before going into default.
  • Insight: Think of Mifos as a Business Intelligence engine and a customer relationship management tool; all the information about a client’s economic status, their demographic, and progress out of poverty is stored and can be reported on in Mifos
  • Services the Customer Needs: Coupling this insight with the far-reaching capabilities that M-PESA provides, Nuru can deliver the services customers need, when, where and how they need them. For clients like Charles M., who runs a motorcycle taxi business, he can send his payments in via mobile phone. Time is critical for his business, he can now devote the whole day generating income rather than waiting in line or attending a meeting to make a payment
  • More loyal and happy clients: Lowering the cost of services, providing more diverse products to meet client needs, decreasing the likelihood of theft for clients, and offering the power to save through the mobile phone equals clients that trust in Nuru deeply.  Clients will be more active in regional savings meetings and a more engaged and expanding community offering advice on the how the CED program can benefit them will grow.

The list goes on and on. I look forward to watching Nuru measure the value of technology over time. Technology investment is dynamic and Nuru will most certainly need to shift their processes and technology to adapt.  Nevertheless, one thing that will be constant will be what Nuru can do with this value – send it back to the people of Kuria, Kenya through more innovation and better service that will end extreme poverty more rapidly.

Technology ROI is a topic we’re very passionate about. You can learn more at the upcoming AITEC Banking and Mobile Money Conference on March 2 and 3 in Nairobi. Marie Valdez from our team will be speaking about Technology ROI during the New Frontiers in Microfinance session.