Savings through local software development
One way of making progress in achieving the poverty reduction goal is by providing financial services to the poor. Microfinance experts and economists say microfinance services reduce poverty, and its effects are in multiple ways.
Access to financial services forms a fundamental basis on which many of the other essential interventions depend.
One of the main factors that prevent Microfinance Institutions (MFIs) from going to rural areas is the large geographical spread, low population density and small volume of transactions, which makes it more costly to operate from.
MFIs face a challenge to explore creative approaches to cut down costs while serving poor people, especially in remote areas.
Recently, information and communication technologies (ICT) have emerged as a powerful tool to reduce operating costs, so as to make it viable for financial institutions to expand into rural and low-income areas.
Locally, most MFIs have been able to embrace the digital change by computerising their operations. This has allowed them (ICTs) to tap into the rural markets.
Dawn of Aspect Financials 360
Angle Dimension—a local IT firm— promises a change in the sector with the coming in of their locally developed microfinance software called Aspect Financials 360.
Aspect Financials 360 offers a suite of functionalities that are affordable and applicable to the whole Microfinance industry. The system provides a unique, ubiquitous standard platform that supports the needs of MFIs and financial cooperatives.
Angle Dimension Chief Technolog y Officer, Henry Sauzande, said the software aims to assist MFIs in their provision of accessible and affordable diverse services and product packages that they offer to improve the effectiveness of their information management, as well as enhancing efficiency in the general operations of the institutions through process streamlining in order to achieve growth and improved reporting and accountability in a cost efficient manner.
“With the advent of Aspect Financials, MFIs are placed at an advantage of adopting affordable, accessible, and innovative management information systems that bring varying benefits ranging from loan tracking to greater transparency and risk management,” he said.
Sauzande said already, Fodya Sacco and Reserve Bank of Malawi Sacco are currently using the local banking system and the feedback has been overwhelming in how the system is able to operate.
“The Aspect Financials 360 is able to integrate with other payment platforms like mobile money, the national switch and the banking systems to allow for cashless transactions and direct cash disbursement directly from the system to the customers,” Sauzande said.
Views of Ictam on local innovations
The Malawi Government is currently promoting the buying of locally produced products. According to ICT Association of Malawi (Ictam) President, Wisely Phiri, the locally produced software is a game changer.
He said this will offer financial institutions to use local systems instead of the foreign ones.
“These kinds of software’s are not cheap. They cost a lot in terms of licence cost and after sales support. The software developers charge a lot to send their engineers to come on the ground to install the system as they have to factor in the engineer allowances as well as their accommodation on top of the license cost.
“The foreign companies do charge in dollars, making the country lose in terms forex. Locally developed software offers a lot of benefits. The cost is cheap and engineers are locally located. Companies can have trust that if there is a problem with their system someone is nearby to help resolve any issue,” he said.
He cited that for licensed users of say 1,000 companies, they are paying over $400,000 on average as license fees when they buy foreign software’s and they also required to pay for support renewals that are normally charged for around $22 percent of the purchase value per annum.
“For example recently the government was quoted in the papers that they are planning to replace the Ifmis systems for a budget of K10 billion.
“You can see these are not small figures. However when these solutions are developed in Malawi the cost is just a fraction of the cost that the foreign based companies are charging is,” he said.
Opinion of Malawi Government
The Malawi Government has been striving to improve ICT development by coming up with various projects to enhance ICT penetration even into rural areas.
The new innovation has excited Capital Hill and has hence called upon the innovator to join hands with it in branding and marketing the product.
Minister of Information and ICT, Nicholus Dausi, said such innovations need extensive marketing and good publicity.
“This is a very welcome development and as the government we will see how best we can make this system a household name. What you should know is that no country can grow without skilled people.
“We are championing skills development to encourage Malawians to be innovative and stop relying on white collar jobs but rather create employment for others,” Dausi said.
He further said as innovators, they should not only bank their hopes on the government but rather market their products to the private sector.
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