Management Information System
Separate Portfolio and Accounting SystemsThe portfolio and accounting systems are kept separate to allow rapid detection of discrepancies and errors by forcing reconciliation between the two systems, as recommended by an influential MIS paper produced by CGAP/World Bank.
Portfolio management
MBK uses KREDITS, a banking and microfinance software developed by Technical Development Solutions (TDS) of Salt Lake City, USA. This software, using the Microsoft SQL 2005 platform, produces payment schedules and outstanding balances of principal and profit-sharing by client, centre, and field officer, as well as for the whole branch, district or programme. It also produces portfolio at risk at the centre, field officer and branch levels. It contains an extensive client database or “Know Your Customer” (KYC) information system, including name, age, address, identity card number, and socio-economic information such per capita income, family size, and housing index per loan cycle for all clients.
Accounting system
MBK uses Micro-Accounting, an accounting application for microfinance institutions using the Microsoft Access platform developed by Grameen Communications of Bangladesh. The journal voucher information produced manually by the branches is entered in this application at the MIS district office to produce general ledgers, and monthly trial balances at the branch level.
Decentralized Management Information System
Area-based MIS System
MBK has selected an area-based MIS system (made up of 6 branches on average) rather than the more common branch level, due to the scarcity of MIS personnel in rural areas, unstable power supply, absence of telephone land line and connectivity at the branch level, and cost-efficiency. It is also the model adopted and successfully implemented by Grameen Bank in Bangladesh. The functions of the District office and head office are outlined below.
Each area office has an MIS section headed by Team Leader and two MIS staff. This is located in one branch easily accessible by the other five or six branches. In addition to be responsible for the accounting data, the Team Leader supervises two staff on average for the portfolio data. The branches send their daily transaction sheets, called collection and disbursement sheets (CDS), and their daily accounting vouchers, together with the original receipts, to the district office twice a week. The branch keeps a photocopy of the daily vouchers in its files.
The district MIS section produces the following reports:
- Weekly cash reconciliation
- Monthly cash reconciliation
- Monthly portfolio, interest and client responsibility reconciliation
The monthly reconciliation reports are sent once a month to head office. Twice a month, a CD of daily incremental branch-level portfolio data files are sent to Head Office. Once a month, branch-level accounting data files are sent to Head Office.
Data consolidation at head office
On the portfolio side, head office imports and consolidate the district databases twice a month, including customer information and transaction data. This data is then used to provide management with consolidated data on portfolio performance including growth and quality. Portfolio at risk information is produced at the level of individual clients to allow head office staff to monitor the progress in recovering arrears.
On the accounting side, Micro-Accounting has a similar import and export facility. This is used by the district office to export files to head office, and by head office to import branch files sent by the district office. Head office then produces branch-level as well as programme-level consolidated trial balance, balance sheet and income statement on a monthly basis, using the World Bank “Consultative Group to Assist the Poor” (CGAP) format and guidelines.
Human Resource Management System
By the end of 2009, MBK employed around 800 employees. MBK has installed a specialized human resource management application in head office called INTELLIGENT EXPERT to efficiently and accurately deal with the records of such a large and expanding workforce, doubling every year.
The specialized HRD software allows MBK to accomplish the following:
- Maintain a comprehensive personal database, including name, age, address, qualifications, and identification card number
- Produce monthly pay slips, and calculations of income tax and national insurance contributions by both employees and employer
- Maintain detailed record of training days and types of training received
- Detailed records of leave and absence
- Performance evaluation date and grades
- Other historical employee records