Wednesday, September 24, 2008

Poor ICT skills, bane of micro finance firms – Adisa

Business Development and Product Manager, ExpertEdge Software, a subsidiary of Computer Warehouse Group, Mr. Bola Adisa, has identified lack of adequate Information and Communications Technology (ICT) skills in the delivery of effective services in the Microfinance Institutions (MFIs) in the country, reports CHARLES OKOH.

He also said that the absence of support institutions in the sector, incompetent management, poor corporate governance, insider abuse, weak internal controls, poor credit administration and asset quality, and low management capacity of clients are some of the reasons for failure of microfinance initiatives in the past.

Speaking at a recent seminar held at the Event Place in Lagos, Adisa equally identified Micro Finance Institutions as major components of the strategy for poverty alleviation.

According to him the overall goal of MFIs is to transform small-scale income- earning activities from subsistence living to micro-enterprises that provide jobs for others as well as enabling the poor to become not only income-earners but also employers, thus creating Micro – Entrepreneurs.

He further said that new microfinance policy provides for the setting up of private sector driven microfinance banks (MFBs) to offer services to the poor and low income groups.

Mr. Adisa pointed out that for the microfinance scheme to be successful, the use of appropriate technology has to be employed.

“Appropriate technology is not so much about what technology to use but more on the model employed to use the technology,” he asserted, observing that the use of technology would go a long way in helping MFIs to achieve their goals.

“The value addition of technology in enabling microfinance greatly depends on delivery model, operational efficiency and labour cum technology costs, hybrid, cost-aware approaches and accurate matching of device with target functionality are key success factors in use of technology,” Adisa said.

He listed some banking applications such as Orbit, MIFOS, Finacle and so on, Enterprise Servers & Personal Computers (PCs) - Omatek, Zinox, Dell, SUN and HP and databases (MS SQL, DB2, Oracle).

Adisa went on to say that on communications, the likes of the Internet access, Local Area Network (LAN), Wide Area Network (WAN), Very Small Aperture Terminals (VSATs), while on card technologies Automated Teller Machines (ATM) cards, deposit cards come to play, even as the Point of Sales (POS) terminal are some of the technologies available to MFIs.

Adisa whose presentation was titled; Appropriate Technology for Microfinance Institutions, also identified ERP Solutions for Back End Operations (HR, Procurement, etc.), SAP, Oracle, Open Source ERPs, Major Core Banking Solutions SAP, Finacle, Rubicon, Flexcube, T24, etc. Independent Software Vendors, Orbit, Open Source MIFOS: A Grameen Foundation Initiative as some of the software applications.

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