Concrete Floors and the Digital Ceiling – Building MicroFinance Banking MIS in Chile

Early on to my arrival at Fondo Esperanza I decided to conduct the MIS survey, as I figured what better way to learn how the overall work of this organization is being captured? The survey Kiva provided consisted of 55 questions that ranged from the general capabilities provided by the MIS to the rationale of why the MFI choose the system, how it functions, and the updates it plans to make.

I interviewed Hector Suarez, Manager of Information Systems, and Diego Arredondo, the Director of Information Systems, and was just taken aback by their story. Through their answers I came to learn about the overall progression of how Fondo Esperanza came to adapt and create their own Management Informational System – MisFE.

In 2003, Fondo Esperanza encountered difficulty identifying a MIS that would meet their needs. They were directed to use systems that companies had developed for big financial institutions as these could be adapted to meet the needs of this small MFI. They took this route at first, but it was not easy and the costs associated in the long-run did not coincide with the benefits.

As a result, Fondo Esperanza started to develop MisFE in 2006 and little by little began to incorporate features that met their needs. Last year the organization took a bold move and decided to integrate all of their work into MisFE and stopped using the other system altogether.

Fondo Esperanza has three engineers on staff and four informational programmers dedicated to the development and daily functions of MisFE. Fondo Esperanza utilizes MisFE today to support 35,000 micro-entrepeneurs across the country, from Iquique to Chiloé with a total of 31 offices, serving more than 116 communes throughout the country.

Click to view slideshow.

There are particular obstacles Fondo Esperanza has encountered with the creation of MisFE. The first one came about when they decided to change accounting programs to SAP and needed to create an intermediary system to integrate this information and ensuring that this was up to date took longer than anticipated. The second setback was due to the earthquake last year and Fondo Esperanza responded to borrower needs by providing 6 new emergency products and MisFE required updates to regress information that previously did not exist. These changes took priority over others and are anticipated to be completed by next month or in October. Currently MisFE only has credit information of borrowers as of June 30th, 2010. Once they get this information up to date they anticipate only a delay of 3 days to produce accurate credit reports (kiva reports as well) — these tasks are currently being monitored manually.

The progression of MisFE and Fondo Esperanza are astonishing and even though I am not a financial software guru I feel Fondo Esperanza is on the right path. Throughout the years Fondo Esperanza has remained in tune to the needs of their clients and staff and has logically worked to meet those needs. The staff at Fondo Esperanza embraced this change finding the MisFE platform user-friendly and flexible which has increased their efficiency and with future changes to come this is likely to increase. With a bit of optimism we are anticipating good things from MisFE.

Fondo Esperanza (FE) is currently the largest Chilean microfinance organization and is proudly Kiva’s first microfinance partner in Chile! To view & read the bios of all the loans Fondo Esperanza has uploaded to Kiva to date, click here!

Join the Kiva Lending Team: Fondo Esperanza!