RD FD – A TECHNOLOGICAL BOON TO MICROFINANCE

MICROFINANCE, if described in simple words is the offering of microloans to those sections of our society who are looked down upon by the so called  higher classes . This concept  came into existence in the late 1970’s . It was mainly built with the motto of curbing out poverty from a nation. Microfinance mainly captured the market of developing countries like INDIA .  Initially , banks were not supposed to provide microloans  because of the fact that the people applying for loans used to have no or very little assets . But now-a-days , commercial banks like the gramin banks have come up in rural areas to provide the  under-priviledged classes of the society indirectly proceeding towards rural development.

Now came into existence the software built to fulfill the tasks of these institutions or organizations . RD FD  is one such software instituted to perform different tasks involved in managing a microfinance organization. RD  stands for recurring deposit and FD stands for fixed deposit . The various features of this software which makes it a technological boon for a microfinance organization are as follows:

• This software enables options for  members’ registration and agents’ registration online.
• The software is responsible for any kind of accounts transactions such as account opening , renewal of an account , closure of any account etc.
• If the divisional manager or a branch manager wants to block a member or an agent , he can also do that with the help of RD FD software.
• Pre - maturity closing of an account.
• It acts as an instalment master.
• It creates a daily collection report and saves it the data in the data storage.
• If any account gets matured that maturity report is also placed in the software.
• Due renewal report is also generated through this software.
• It calculates commission of each agent and generates commission report.
• RD FD software maintains member and agent login details.
• Which customer is enrolled under which agent – this information is also generated and stored through this software.
• Cheque printing , bond printing , web based manual printing are fulfilled with the help of the above mentioned software.
• SMS and e-mail integration are important features of this.
• Alerts and reminders through smss and e-mails are an added advantage.
• It controls branch management of every microfinance business .

 

• If any of the loaned person fails to give the loaned amount on time  , this software automatically generates penalty statement in the name of the customer.
• The all in all account reports are retrieved from the data storage by this software without any internal errors and with efficiency.
• As every coin has it two sides – the bad side and the good side . Same is the case with RD FD Software . Its negative point is that for a small microfinance firm it is very difficult to buy this microfinance software because it is very costly.

IMPORTANCE OF MICROFINANCE SOFTWARE IN THE BANKING SECTOR

Microfinance is basically understood to ensure the financial security of small entrepreneurs and small businesses which can not reach up to the level of taking credit from large institutions like banks because of high rate of transaction charges and unable to fulfill their clauses. The main target of microfinancial institutions is to eradicate poverty.

Initially, banks didn’t used to provide microfinances due to the reason that micro-entrepreneurs lack capital  and at times the small or no assets of  small-scale businesses. But now-a-days we see that commercial banks have grown up for this purpose. Like gramin (rural areas) banks in rural areas provide loans to farmers and cultivators for buying new machineries, fertilizers, etc. so that they can cultivate their land and earn their livelihood in a better way.

For these banks to operate in a better way, microfinance software is the only option . Microfinance Software is specially designed to serve the purpose of  microfinance. In banks providing microfinance to small scale industries microfinance software plays a vital role. The following are the various ways in which a microfinance software assists a bank, giving microfinance:

•  The software helps banks to store data about members registration
• Moreover,it gives the details about Branch management which includes division of different branches of a bank and allocation of their resources.
• Third comes the product management. There comes various schemes or plans for various customers. Microfinance Software determines the terms and conditions of each scheme or plan. Under this we find service tax calculation according to the loan amount,grading loans, survey field creation,assessment of registration fee.
• Microfinance software helps the users of banks to change their passwords whenever they want, helps them with all the valuable information they want regarding the sanctioned loan or its customers.
• Loan processing, an important function of microfinancial software , enables a bank to decide whether a customer applying for the loan is capable  of paying it back or not.
• Loan Disbursement is the terminology that describes the process of automatic generation of monthly/ quarterly  instalment dates as soon as the loan is being sanctioned by the bank to the customer.
• One more task of the software which makes it inevitable for the commercial banks to do without it is the allocation of capital or funds between different branches and the head office.
• After the loan disbursement comes the time for loan recovery from the customers. Here, it shows the date-wise collection sheet of the instalments, how many times the customers fail to pay the EMI on time,etc.

 Thus, from all the above-mentioned points its clearly visible that a microfinance software not only helps the banks to keep a track of its loaned customer but also helps banks in multiple other ways.

Microfinance software the small can do the big

In the event you think only about microfinance then it refers  to the provision of financial  services to the small enterprises because they may not afford  the transaction related costs with the banks or other financial institutions. On the other hand when you consider microfinance software you will find  the small concerns can considerably cut down the cost & overhead at one hand quite and on the other  importantly focus on its core business with the applications of such software,  the service profile is referred with relation  to various software which enable any small concern to optimize resource planning with reference to manufacturing process, supply channel, human resources, payrolls, loan processing and PR management. You can find the trusted providers of technology solutions customized to the need of small and micro concerns.

Various issues crop up when managing branches are concerned you can have complete solution in this regard. The moment the various steps are considered you will find control user permission can protect all of your enterprise information at the branch, moreover the software enable to create branch reports which is a significant tool in monitoring branch operations. it is really very important to maintain the quality of product and comply with other regulations.In this case relevant soft ware can enable you to  effectively manage the process, it results in reduction of wastage in terms of time and material, it is a great way to manage inventory( which is a common headache).You can have access to the ideal type of  microfinance software so that you can have a definite understanding of flow of funds and you can plan more comprehensively. It is the managing the balance sheet and the off balance sheet factors so that the difference between interest earned and paid is maximised. To  your advantage you will find that you can very effectively manage your cash flow so you can ensure smooth business operations.

To the great business advantage you will find such software where loan origination, analysis, risk management and, servicing, and  litigation module  and other associated services can be carried out effectively. The automated  loan servicing module is the opening point of loan servicing. The associated sub module refers to payment processing and the litigation processing module take care of the losses if the loans are not paid. In case you want to attract  the investors for funds then it is just fundamental that your loan portfolio must be backed by the business presentations and solid financial projections and historical data. You will find such software so that you can attract the attention of the investors to the interest of your business or the opportunity you are offering. In fact the loan portfolio is the main source of revenue. This type of software will enable you to identify the exposure factors , in this regard the loan administrative section consists  of policies and procedures so that your loan and investment portfolio not only be made immaculately but also  you will save in terms overheads and man-hours. The loan tracking management information system is very useful to see you business dreams materialize.

Difference between NBFC Software and Microfinance Software

As each business is diverse from the alternate, aid suppliers have thought of budgetary administration fixes for begin-ups and little occupations that have uniquely composed answers. The aforementioned utility suppliers in addition give microfinance software fixes that can help specialities meet the tests of the industry. With this programming explanation, there could be huge reserve funds as by just utilizing the one programming provision to perform a nearly infinite amount of diverse undertakings, the alternate programming requisitions are conclusively made repetitive. In light of the fact that a micro back programming has certain headlines like

Client-accommodating: Maximum microfinance programming perfect with the MS Office Suite, every last one of the articles being exportable to Excel. Bookkeeping module permits you to fare your operations reports straightforwardly to your third answer (Sage, 1C, OpenERP…). 

Strong: Maximum Microfinance programmings are created in C#/.Net, an overall-tested innovation for keeping money programming growth. The aforementioned are improved as per IT best practices that assurance a top notch level of strength, reliability and fitness to your practices. Some computerized tests surety that counts are right. 

Adaptable: With Microfinance programming's, you are not restricted as far as clients, limbs or information volume. You can make your items advance rapidly to acclimate to your clients, your contenders and the business drifts. It might be multi-dialects, multi-bases and multi-limbs. It creates more than 40 definite reports. 

Secure & Transparent: You can secure your information because of a truly basic and mechanized incremental reinforcement administration framework . With an open-origin code, you profit from an insurance of transparency because of a 100% control over the way your information are can't help being treated.

You can pick the humble business money related administration programming that suits your group best by assessing your budgetary and qualified data administration needs. Monetary administration programming that is configured for minor business is regularly more straightforward to establish and administer than full-offered undertaking fiscal suites.

By and large, all NBFCs are needed to be enrolled before affirming store. The focal points of these available stores are that they ordinarily award higher rate of investment. Where your bank may give 7-8% profit for your settled store, you might get 10-12% profit for these stores. The disservice is that the stores are unsecured. It indicates that you are bearing the danger of contributing as you may lose your cash if most exceedingly bad case. Along these lines, if to sink money into such instruments or not by any means relies on your solace level with the group. In any case, you might as well contribute a modest part of your cash in such instruments. They can add zest to your portfolio.

ADVANTAGES: 

1. Exceedingly adaptable headlines guarantee flawless match with the necessities. 

2. Minimized information passage to keep away from human failures and expand use speed. 

3. Absolutely simple client interface planned investigative for workstation uneducated folks.

4. Customizable headlines to match your prerequisite.

5. Above all prudent estimating for the period.

6. Time tested fix guarantees least mistakes.

7. We guarantee the conveyed requisition fits client prerequisite.

8. 100% cash back certification on rebelliousness of the qualities with the endorsed suggestion.

9. Devoted uphold crew which is proficient to revisit the backing call connected within 2 hours. 

Different Modules of Microfinance Software

Microfinance software is a software which is basically designed for every financial transactions in an organization –be it small or big.It has different modules which defines the functions of microfinance software more easily.They are:

1)branch management:dealing with the information of a branch of an organization. Information includes features of a branch.number of workers, etc..

2)Product management:it includes providing the customers necessary information about the products and managing its demand and supply.

3)PO management: This is all about creating groups by the group master and the retainment of information of those groups by the employee master.

4)User management:It defines the restrictions and access of different users to different sites.

5)Insurance management:it deals with the negotiations of the insurance organizations with the death of the customer.

6)member registration:This topic gives  us a vivid idea about how to register a member or to modify their details.

7)Loan security management:many-a-times customers who take loans are unable to repay the money back on time.then the loan security management takes the responsibility of taking the money from them on a weekly basis or as convenient for the customer.

8)loan processing:including steps involved in providing a loan to the customer like document submission before loan sanction etc..

9)Financial accounting:it’s the process of keeping an account of the financial transactions between companies.

10)Fund management for head office:transfer of funds, funds allocation to different branches etc –all come under this module

11)Loan disbursement:after a loan is given to a customer, an interest is collected from the customer every month or on an agreement based way.this all comes under loan disbursement.

12)Loan recovery:last but not the least loan recovery keeps record of the loans already recovered.loans to be recovered,customers details.

The Microfinance Software should contain state of the art design and assistance for the customers and provide online help desk. It is a perfect choice for the targeted customers and smartly negotiates the problems and issues of them.

Microfinance Software Features

vERP provides new microfinance software which features a very high level automation. This helps Micro Finance Institutions to deliver excellent customer service and satisfaction with minimum number of stuff. Some of the features are mentioned below,

Branch Management: This includes New Regional Office, New Division Office, New Branch Office and Portfolio Backlog Transfer.

Product Management: Survey Field, Assign Service Tax,  Loan Product, Loan Gradation, Written-Off Master & Registration Fee.

PO Management: Group, Employee Registration & Assign Group to PO.

User Management: User,Change Password and User data entry status.

Insurance Management: Death Document from Branches, Claim Insurance, Claim Observed, Claim Received, Death Outstanding Settlement & Reclaim Rejected Claim.

Members Registration: Customer Survey, Survey Review By BM, Survey Review By RM, New Member Registration, Edit Member & Group To Group Transfer.

Loan Processing: Document Submit, Loan Processing & Loan Recycle.

Financial Accounting: Account Register, Opening Balance Register, Account Contra Entry & Journal Entry.

Fund Management for Head Office: Fund Type Master, Fund Master, Fund Received, Fund Payment & Fund Allocation.

Fund Management for Branch: Fund Received By Branch, Fund Payment By Branch, Fund Transfer & Branch to Branch Payment.

Loan Disbursement: User, Change Password & User Data Entry Status.

Loan Recovery: Loan Recovery, Sick Payment, Written-off & Bad Debt Analysis.

All the above mentioned features are completely based on web and latest technology.

What is Microfinance Software?

Microfinance means for providing financial support or financial services to the low income people, small business or small group of micro entrepreneurs, self employed clients and others who look for microfinance in both urban and rural areas of a country. Microfinance helps people not only grow their business efficiently and successfully but also enables them to enjoy a better life style and make them out of poverty through  more employbilitiy and better revenue. Poor and near poor people not having access to local banking due to unavailability of banks in their locality or high service and transaction charges, require microfinance support which serves the low income employees all the necessary supports at minimum cost.

There are many Microfinance companies who require softwares for efficient operations and management of various services keep running. vERP is a reputed and leading software development company which plays a vital role for innovation of new softwares on microfinance with latest technologies available.

vERP offers complete web based easy to use, flexible microfinance software solution which includes the following module.

·          Branch Management,

·          Product Management,

·          PO Management,

·          Fund Management,

·          Member Management,

·          Loan Processing Management,

·          Loan Security Management,

·          Loan & Portfolio Management,

·          Accounting System Management and

·          Reports analysis, etc.

For more detail please wait till next post.