SYSTEM AND METHOD FOR AUTOMATING MICROFINANCE OPERATIONS

BACKGROUND

[0001 ] The invention relates generally to microfmance and,more particularly, to an automated technique for enabling transactions in the area of microfinance, microlending and microinsurance.

[0002] Microfinance refers to the provision of small-scale financial services and sustainably delivering such services to low-income consumers for their occupational needs. The low-income consumers may include farmers, fishermen, lower skilled laborers, owners of small shops or microenterprises, and so forth, in both urban and rural areas. The benefits of such loans to the microfinance entities are that they are low on risk and high on returns. For the low-income consumers, the benefits are to increase the earning of the consumers through financing thereby easing or in some cases eradicating poverty. Because of the higher rate of returns and lower risk, many banks and financial institutions have ventured into this field.

[0003] As illustrated in FIG. 1, the process of micro financing involves recruiting local people who personally know the community and area, as agents, and educating the agents about the various fmancial services and products. Each agent then makes field trips and forms a group of people who can vouch for each other. Each group is then educated about the financial services, repayment procedures, group benefits and responsibilities, and so forth. The agent's supervisor or the branch manager then meets with these groups and checks their knowledge. The group is then approved or retrained based on their knowledge. One or more members of the approved group may then raise a request for various financial services such as a request for a loan. The branch manager manually reviews the request and sanctions or denies the request. Sanctioned loans are then disbursed through the agents to the consumer. The agent may then collect the periodic installments from the consumer at periodic and regular intervals and record these periodic installments using manual receipts. The data from these collection receipts are then manually entered or transferred into the management information system (MIS) of the microfinance entity.

[0004] Thus, typically in the field of microfinance, accessing information
from remote areas, processing the same, and facilitating the interactions and/or transactions are each carried out manually via the agents. For example, FIG. 2 illustrates the current collection process that is manual and driven by the field agents. As illustrated, each agent prints a demand sheet from the MIS system before going to the field. The agent then visits the groups and look for the customer listed in the demand sheet. The agent then collects the installment and issues a manual receipt. After visiting each customer in the demand sheets, collecting installments, and issuing manual receipts, the agent comes back to the branch and hands over the money. The branch manager tallies the money and receipts and accepts the money along with the receipt from the agents. The branch manager then manually transfers the data from the receipt into the MIS system.

[0005] As the microfinance institutions are trying to scale up their operations to cater to growing demands, they either need to increase the agent workforce by multiple times or achieve operational efficiency through the use of technology. However, the microfinance entities find it difficult to hire and retain the agents. Additionally, for the limited number of agents in the field, there are many activities that can be automated but have not been due to lack of connectivity. Further, in the field of financial inclusion for the masses, the greatest difficulty is the reach of technology to the far-flung areas that do not have the basic electric/communication infrastructure. In other words, the field of microfinance is at a stage of rapid growth due to huge market potential but lacks appropriate technology to enable the same.

[0006] It is therefore desirable to provide cost effective and efficient techniques and devices to automate the processes so that the microfinance institutions achieve greater reach and speed while minimizing the cost of operations.

BRIEF DESCRIPTION

[0007] Briefly, in accordance with one aspect of the technique, a portable device is provided for microfinancing. The portable device includes a commvmication module configured to communicate consumer specific data with a central information system of a microfinance entity over a communication channel. The portable device fiirther includes a transaction module configured to identify a consumer, access associated transaction details, process the associated transactions, update and record the transaction details, and provide transaction details to the consumer.

[0008] In accordance with another aspect of the technique, a portable device is provided for microfinancing. The portable device includes a communication port for establishing communication with a central infonnation system of a microfinance entity over a communication channel, one or more peripheral devices for interfacing with a user, and a memory for storing information and routines. The portable device fiirther includes a processor for executing the routines to download a consumer specific data from the central information system to the memory, identify a consumer through consumer identification entered through the peripheral devices, access associated transaction details from the memory, process the associated transactions, update and record the transaction details to the memory, provide transaction details to the consumer through the peripheral devices, and upload the updated data from the memory to the central information system.

[0009] In accordance with a further aspect of the technique, a method is provided for microfinancing. The method provides for downloading consumer specific data from a central information system of a microfinance entity,identifying a consumer through a supplied consumer identification detail, accessing associated transaction details of the consumer from the downloaded consumer specific data, and processing the associated transactions. The method further provides for updating and recording the transaction details, providing transaction details to the consumer, and uploading the updated transaction details to the central information system. Systems and computer programs that afford such functionality may be provided by the present technique.

DRAWINGS

[0010] These and other features, aspects, and advantages of the present invention will become better understood when the following detailed description is read with reference to the accompanying drawings in which like characters represent like parts throughout the drawings, wherein:

[0011] FIG.1 depicts a generic process followed by microfinance institutions to provide financial services to consumers;

[0012] FIG.2 depicts a current collection process followed by the agents;

[0013] FIG.3 is a schematic of an exemplary microfinance system along with a portable device to automate certain processes of microfinancing in accordance with aspects of the present technique;

[0014] FIG. 4 is a schematic of an exemplary portable device for use in the microfinance system of FIG. 3 in accordance with aspects of the present technique;

[0015] FIG. 5 is a flowchart illustrating an exemplary automated process for microfinancing in accordance with aspects of the present technique; and

[0016] FIG.6 is a flowchart illustrating an exemplary automated collection process in accordance with aspects of the present technique.

DETAILED DESCRIPTION

[0017] The present techniques are generally directed to automating processes and transactions in the area of microfinance, microlending and microinsurance through a portable device. Such automated techniques and devices for enabling the same may be useful in a variety of other contexts, such as merchandising, advertising, marketing, and so forth. Though the present discussion provides examples in context of microfinance, one of ordinary skill in the art will readily comprehend that the application of these techniques in other contexts, such as for merchandising, advertising, marketing, is well within the scope of the invention.

[0018] Referring now to FIG. 3, a schematic diagram of an exemplary microfinance system 10 is illustrated in accordance with aspects of the present technique. The microfinance system 10 includes a central microfinance institute 12 that provides financial services to consumers through its various branch or regional offices 14. All of the information of the central microfinance institute 12 and the branch offices are maintained in their respective information management systems (MIS) 16. The MIS 16 may therefore store information such as consumer names, their loan details, their payment history, request for new loans, loan approval or disapproval details, past repayment track record, and so forth. As noted above, each branch office 14 includes a branch manager 18 and a workforce of agents 20 who are local to a region and are familiar with the people in the local community. The agents 20 interact with the consumers, provide adequate education about the process, form groups, handle loan requests, disburse the loans, and collect the installments. In short, agents 20 are the interface between the microfinance institute and the consumers. The branch manager 18 oversees the operation of the branch, approves groups based on their understanding of the process, sanctions loans, keeps track of collections, handles money, and so forth.

[0019] Each agent 20 is provided with a portable device 22 so as to increase their operational efficiency in accordance with aspects of the present technique. As will be discussed in greater detail further below, the portable devices 22 assist the agents 20 in their fieldwork by automating certain processes of micro financing such as consumer identification, record retrieval, collection, receipt generation, data reconciliation, and so forth, thereby enabling faster operation and increased efficiency. The portable device 22 includes a communication module 24 and a transaction module 26.

[0020] The communication module 24 communicates consumer specific data with a central information system of the microfinance entity (e.g., MIS system of the branch office) over a communication channel 28. The consumer specific data may include consumer details (e.g., consumer name, identification, address, group association, and so forth) and associated transaction details (e.g., loan approval and disbursement details such as sanctioned loan amount and date of disbursement, installment and loan repayment details such as installment amount, period of repayment, date of collections, payment details such as payment history, amount collected till date, remaining amount, and so forth). It should be noted that the communication channel 28 may be a secured communication channel and may include a wired or a wireless communication channel such as Internet, local area network (LAN), wide area network (WAN), data cables (e.g., RS232 cable, USB cable, and so forth), GSM network, GPRS network, satellite network, and so forth. As will be appreciated by those skilled in the art, the communication module and the central information system may each include a configurable metadata layer to enable the communication. The metadata layer enables the communication between the portable device and the central information system to be platform independent.

[0021] The transaction module 26 identifies a consumer, accesses associated transaction details, processes the associated transactions, updates and records the transaction details, and provides transaction details to the consumer. The identification of the consumer is performed based on consumer identification details provided via one or more peripheral devices 30. The input peripheral devices may include a finger print reader, an identification card reader, a keyboard, and/or a camera. The consumer may provide his finger print impression on the finger print reader. Alternatively, the consumer may produce his identification card for being swiped in the card reader or for the identification number to be punched in through the keyboard. In certain embodiments, a camera may take picture of the consumer and/or the group for identification purposes. The associated transaction details of the identified consumer details such as the amount that needs to be collected from consumer or the amount the needs to disbursed to the consumer is then displayed to the agent through a display device. The agent performs the appropriate action such as disbursement or collection and enters the details through the keyboard. The transaction module then processes, updates and records the performed transactions, generates a receipt of the performed transaction, and provides the consumer with a receipt via one or more peripheral devices 30. The output peripheral devices may include a printer such as a thermal printer, a display, and/or a card write device.

[0022] In certain embodiments, the transaction module 26 is configured to determine or compute transactions in-situ. For example, if a consumer requests for a small loan, the transaction module may activate a loan appraisal software application for approving the loan. Such loan appraisal application may then approve or disapprove the loan based on consumer details, past credit history, repayment capacity and so forth. Based on the approval, the agent may instantaneously provide the consumer a loan and update the records in the portable device. The recorded and updated data (consumer details and associated transaction details) is subsequently transferred to the central information system or the MIS system via the communication module. It should be noted that the transfer of data may be done at the end of the day when the agent has finished his fieldwork over a wired or wireless network. Alternatively, the transfer of data may be done in real time or in batches at periodic intervals while the agent is still the field over a wired or a wireless network or via a phone-link (e.g., mobile operator network, telephone lines).

[0023] In certain embodiments, the branch office may track the movement of the agents for precautionary or dispute resolution purpose. The agents sometimes carry substantial amount of cash with them in remote locations and therefore need to be tracked. Moreover, the microfinance entities charge a penalty to the customers even if they delay the installment payment by one day. The customers sometimes complain that the agent was not available at the identified collection point to collect the installment at the right day or at the right time. Keeping track of the agents' movement may therefore be important for the microfinance entities. The portable device 22 may additionally include a position-sensing device 32 for receiving positional information of the portable device. It should be noted that the position sensing 32 device may be adapted to track the location of the asset periodically or continuously. The received or determined positional information is then communicated to the central information system via the communication module 24 along with a date and time stamp. Moreover, the device already captures the amount of cash collected from customers or disbursed to customers at any given date and time. Thus, the information regarding total cash available with the agent may be relayed to the central information system along with the positional information and the date and time stamp. This enables the microfinance entity to keep track of whether the agent reached the designated meeting location or the customers on time and how much cash the agent is carrying.

[0024] FIG. 4 illustrates a schematic dia^m of the portable device 22 in accordance with aspects of the present technique. The portable device 22 may generally include a processor 34, a memory 36, and peripheral devices 30 (also referred as input/output devices) connected via a data pathway (e.g., buses, cables and so forth) 38. The processor 34 accepts instructions and data from the memory 36 and performs various data processing fiinctions of the device 22. As discussed in detail above, these data processing fiinctions include downloading a consumer specific data from the central information system to the memory, identifying a consumer through consumer identification entered through the peripheral devices, accessing associated transaction details from the memory, processing the associated transactions, determining or computing transactions in-situ, updating and recording the transaction details to the memory, providing transaction details to the consumer through the peripheral devices, uploading the updated data from the memory to the central information system, and so forth. The processor 34 includes an arithmetic logic unit (ALU) that performs arithmetic and logical operations, and a control unit that extracts instructions from memory 36 and decodes and executes them, calling on the ALU when necessary.

[0025] The memory 36 stores the various routines as well as a variety of data and information computed by the various data processing functions of the device 22 or received from the input/output devices 30. These routines and data processing functions perform the above-discussed functions of the communication module and the transaction module. The data may include, for example, transaction details and consumer details related to the consimier. The memory 36 generally includes a random-access memory (RAM) and a read-only memory (ROM); however, there may be other types of memory such as programmable read-only memory (PROM), erasable programmable read-only memory (EPROM) and electrically erasable programmable read-only memory (EEPROM). Also, the memory preferably contains an operating system that executes on the processor 34. The operating system performs basic tasks that include recognizing input, sending output to output devices, keeping track of files and directories and controlling various peripheral devices. The information in the memory 36 might be conveyed to a human user through the peripheral devices 30, the data pathway 38, or in some other suitable maimer.

[0026] The peripheral devices 30 may act as an interface between the user and the device 22 and may include a keypad 40 that enables a user to enter data and instructions into the device 22. Additionally, the peripheral devices 30 may
include a display device 42 that enables the user to view the available information and a printer 44 that enables the user to print any data for reference. Further, the peripheral devices 30 enable the portable device 22 to acquire identification data. In particular, the peripheral device 30 may include a reader configured to acquire information from a readable device such as a transaction card and/or a mobile telephone. For example, the peripheral device 30 may include a card read/write device 46 configured to read information from a transaction card and to write information on the transaction card when the transaction card is swiped or presented to the device 22. Alternatively, the peripheral device 30 may include a data cable, a Bluetooth port and/or an infrared port to read consumer identification details from the mobile telephone. The peripheral devices 30 may further include a finger print reader 48 for scanning the finger print impression of the consimier and a camera 50 to acquire the picture of the consumer. Alternatively, the peripheral devices 30 may include a retina scanner (not shown) or other similar consumer identification hardware. The finger print impression and the picture or other similar consumer identification information may be used for identification purposes or for preparing the loan application.

[0027] The device 22 may further include a communication port 52 such as a telephone, cable or wireless modem; a network card such as an Ethernet adapter, local area network (LAN) adapter, integrated services digital network (ISDN) adapter, or Digital Subscriber Lme (DSL) adapter; a USB port; IEEE 1394 port; and so forth, that enables the device 22 to access other devices, computers, and resources on the communication channel 28. In particular, in certain embodiments, the communication port 52 enables the portable device 22 to access the central information system of a microfinance entity (e.g., the MIS system of the branch office) over the communication channel 28. As discussed above, the communication channel may be wired or a wireless communication networks or data cables.

[0028] In certain embodiments, the device 22 may also include a position-sensing device 32 for receiving or determining positional information of the portable device that is then communicated to the central information system along with a date and time stamp through the communication port 52. The position-sensing device 32 may include one or more of a GPS-based position sensing device, a TV-based position-sensing device, a wireless access point network-based position-sensing device, or a GSM network-based position-sensing device. These position-sensing devices 32 utilize TV signals, GPS signals, GSM signals, or wireless network signals for receiving or determining positional information of the portable device.

[0029] An onboard rechargeable power source (e.g., rechargeable battery) 54 may be provided within the portable device so that the device 22 can function without needing constant supply of power in remote locations. The rechargeable power source 54 may be periodically charged through an external power supply 56 as and when the external power supply 56 is available.

[0030] The device 22 may also include a mass storage device 58 to allow the device 22 to retain large amovmts of data permanently. The mass storage device 58 may include all types of disk drives such as floppy disks, hard disks and optical disks, as well as tape drives that can read and write data onto a tape that could include digital audio tapes (DAT), digital linear tapes (DLT), or other magnetically coded media. The above-described device 22 may also take the form of a hand-held digital computer, personal digital assistant computer, notebook computer, and so forth.

[0031] As will be appreciated by one skilled in the art, a variety of techniques may be employed to automate the process of microfinancing. In particular, as will be appreciated by those of ordinary skill in the art, control logic and/or automated routines for performing the techniques and steps described herein may be implemented by the portable device 22, either by hardware, software, or combinations of hardware and software. For example, suitable code may be accessed and executed by the processor to perform some or all of the techniques described herein. Similarly application specific integrated circuits (ASICs) configured to perform some or all of the techniques described herein may be included in the processor.

[0032] For example, referring now to FIG. 5, exemplary control logic 60 for microfinancing via a processor based device, such as the portable device 22, is depicted via a flowchart in accordance with aspects of the present technique. As illustrated in the flowchart, the control logic 60 includes the steps of downloading consumer specific data from a central information system of a microfinance entity at step 62, identifying a consumer through a supplied consumer identification detail at step 64, accessing associated transaction details of the consumer from the downloaded consumer specific data at step 66, processing the associated transactions at step 68, updating and recording the transaction details at step 70, providing transaction details to the consimier at step 72, and uploading the updated transaction details to the central information system at step 74. In certain embodiments, the control logic 60 may further include the steps of receiving positional information of the portable device and communicating received positional information along with a date and time stamp to the central information system.

[0033] By way of ftirther example, an automated collection process 76 enabled by the portable device 22 is illustrated in FIG. 6 via a flowchart. As illustrated in the flowchart, the automated collection process 76 includes the steps of communicatively connecting the device to the central information system for the transfer of data from the information system to the device at step 78, visiting the groups in field and looking for the customer details in the portable device at step 80, collecting installments and issuing device generated electronic receipts at step 82, and communicatively connecting the device to the central information system upon return for the transfer of updated data from the device to the central infonnation system at step 84. Upon data transfer from the device 22 to the central information system, the amount handed over to the branch manager is tallied against the amount computed by the central information system based on the received data. Thus, the receipt data is automatically synchronized with the central information system and reconciliation is done almost instantaneously.

[0034] The device and techniques described in various embodiments discussed above, allow all basic operations and transactions to be automated through on-board power, processing capacity, memory, apphcation hosting capability, display and printing in a cost effective manner. As will be appreciated by those skilled in the art, there is no need for power and network connection for the device to be rolled out in the field since the device operates with its on-board power, memory and teleconnectivity. The device can host apphcations that can be designed and mapped to reflect specific business processes of the microfinance entity, thereby automating many repetitive and non-value added steps in the operations. As noted above, in the manual processes, the back-end reconciliation was a critical limitation requiring a substantial amount of time and effort by the branch manager. However, by automating the information collection, retrieval and dissemination, the back end reconciliation is no more an issue. Thus, the agents and the branch managers save their substantial amount of time for more critical activities such as forming groups and providing financial literacy to the consumers. This increases the operation efficiency of the microfinance institutions, thereby providing them with greater reach and speed while minimizing the cost of operation.
[0035] While only certain features of the invention have been illustrated
and described herein, many modifications and changes will occur to those skilled in the art. It is, therefore, to be understood that the appended claims are intended to cover all such modifications and changes as fall within the true spirit of the invention.

We claim:

1. A portable device for microfmancing, the portable device comprising:

a communication module configured to communicate consumer specific data with a central information system of a microfinance entity over a communication channel; and

a transaction module configured to identify a consumer, access associated transaction details, process the associated transactions, update and record the transaction details, and provide transaction details to the consumer.

2. The portable device of claim 1, wherein the consumer specific data comprises consumer details and associated transaction details.

3. The portable device of claim 1, further comprising a position sensing device for receiving positional information of the portable device and wherein the communication module is configured to communicate received positional information along with a date and time stamp to the central information system.

4. The portable device of claim 1, wherein the communication module and the central information system, each comprise a configurable metadata layer to enable the communication.

5. The portable device of claim 1, wherein the transaction module is configured to identify the consumer based on consumer identification details provided via one or more peripheral devices.

6. The portable device of claim 1, wherein the transaction module is further configured to determine or compute transactions in-situ.

7. A portable device for microfinancing, the portable device comprising:

a communication port for establishing communication with a central information system of a microfinance entity over a commimication channel;

one or more peripheral devices for interfacing with a user;

a memory for storing information and routines; and a processor for executing the routines to download a consumer specific data from the central information system to the memory, identify a consumer through consumer identification entered through the peripheral devices, access associated transaction details from the memory, process the associated transactions, update and record the transaction details to the memory, provide transaction details to the consumer through the peripheral devices, and upload the updated data from the memory to the central information system.

8. The portable device of claim 1, further comprising a position sensing device for receiving positional information of the portable device and wherein the communication port is configured to communicate received positional information along with a date and time stamp to the central information system.

9. The portable device of claim 7, wherein the peripheral devices comprises at least one of a finger print reader, a transaction card read/write device, a keyboard, a camera, a display, a printer, or a combination thereof.

10. A method for microfinancing, the method comprising:

downloading consumer specific data from a central information system of a microfinance entity;

identifying a consumer through a suppHed consumer identification detail;

accessing associated transaction details of the consumer from the downloaded consumer specific data;

processing the associated transactions;

updating and recording the transaction details;

providing transaction details to the consumer;
and

uploading the updated transaction details to the central information system.