Best Microfinance Software For Your Business

September 06, 2022 Admin
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Microfinance is a financing strategy that primarily targets the socially or economically marginalized populace that has little or no access to financial services. It enables people to take on modest small business loans safely and in accordance with ethical lending principles. It encompasses microcredit (the provision of microloans to financially ‘excluded’ members of society), savings and checking accounts, micro-insurance, and payment systems, among other things. Microfinance software is a smart tool for microfinance institutions, who can use the software to ensure systematic and thorough execution of the numerous financial services they offer.

 

What is Microfinance Software?

Microfinance institutions provide financial services to the unbanked sector of society and to small businesses with small-ticket loans. The definition of "small loans" differs across countries. In India, any loans under Rs.1 lakh are considered microloans. The software aids Microfinance institutions in simplifying the complex procedures involved in the credit lending process -- documentation, underwriting, authentication, etc.

The software gives micro finance institutions effective micro banking capability to offer various financial services like opening and maintaining a savings account, micro loan management, documentation, underwriting, etc to the unbanked population of the nation. Microfinance institutions have access to financial resources for a large number of unbanked people who have no prior credit history.

 

The need for microfinance software:

To streamline the sophisticated processes of microfinance institutions, microfinance software employs extensive tools for systematized financial accounting, loan disbursement, product management, member registration, insurance management, loan recovery, fund management, and so on.

 

  • Such software can give an all-in-one solution for small credit lending. All parts of lending operations can be handled by the software, thus ensuring speed, transparency, and good risk management. The microfinance software can perform data aggregation over a wide range of unstructured data to extract the necessary information.
  • Microfinance software's user-friendly interface, efficient processes, and all-inclusive accounting software boost operational productivity to fulfil the needs of microfinance institutions. It streamlines the complex lending procedure and ensures that all client information is appropriately captured.
  • By utilizing data compression methods, the cloud-enabled nature of microfinance software programs eliminates accessibility difficulties while providing maximum storage. Microfinance software is a highly secure loan management system -- owing to its user permission constraints and a protected data repository -- with a built-in comprehensive reporting structure and accounting module.
  • Microfinance software has features that help with the monitoring of transactions, compilation of balance sheets, and account audits.

 

Marker Checker Concept

Microfinance software uses maker-checker, often known as maker and checker or 4-Eyes, one of the core concepts of authorization in the Information Systems of financial institutions. According to the maker and checker principle, at least two people are required for the completion of every transaction. Although one person can initiate a transaction, the other person should be involved in its confirmation or authorisation. This maintains strong control over system software and data while considering the functional separation of labour among all employee classes.

 

Functions & Features of Microfinance Software

Application of several interest computation methods on a weekly, monthly, or annual basis.

 

  • Incorporating interest rate revisions for each loan type, which can be applied either to new loans or to all current loans.
  • Application processing.
  • Transaction history in tabular style on the account entry window
  • Loan Management
  • Micro Savings Account Management
  • Microinsurance Management
  • Automatic estimate of insurance premium and maturity
  • Customer documents and KYC processing
  • Analysis and submission of insurance sales and premium collection

 

Best Microfinance Software:

ScoreMe's cutting-edge microfinance software enables a hassle-free experience of microfinancing. The innovative technological prowess of the software complements the seamless execution of operational activities. It has a plethora of different features to assist you with your organizational needs, such as a supervisor option that takes care of daily savings schemes, recurring deposit schemes, fixed deposit schemes, and daily backup; transaction options that include loan disbursal entry, receipt entry, payment entry, and interest calculation; and account report options that include day book reports, general ledger reports, and balance sheet reports.

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