An opinion piece by Rural Finance Practitioner Ramesh S Arunachalam that was recently published in Indian personal finance magazine Moneylife highlights the importance of management information systems (MIS) to microfinance institutions (MFIs) and calls for the establishment of minimum MIS standards as a prerequisite for MFI accreditation in India.
Mr Arunachalam argues that it is essential for various microfinance stakeholders, including the Reserve Bank of India, to look into the current MIS landscape, in order to identify the most basic MIS requirements. Suggested areas of research include MFIs’ level of automation, data accuracy and consistency of internal and external reporting.
By Kristha Abores, Research Associate
About Reserve Bank of India:
Established in 1935, the Reserve Bank of India (RBI) undertakes consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies (NFBCs). The current focus of RBI is to supervise financial institutions, consolidate accounting standards, resolve legal issues in cases of banking fraud, monitor non-performing assets and supervise the rating model for the banking sector. In 1979, the National Bank for Agriculture and Rural Development (NABARD) was formed at the behest of RBI to provide regulatory oversight to regional rural banks (RRBs) and to promote the development of agricultural lenders: tasks that had been the responsibility of RBI. While all microfinance institutions (MFIs) and non-banking financial companies still operate under RBI regulations, the responsibility for inspecting nonprofit MFIs, agricultural lenders, RRBs, state cooperative banks, district central cooperative banks and state cooperative agricultural and rural development banks was transferred to NABARD. RBI maintains these responsibilities for for-profit MFIs. Although RBI was originally the parent organization of NABARD and until October 2010 held a 72.5 percent stake in the outfit, RBI owns a one-percent stake in NABARD as of 2011.
Sources and Additional Resources:
[1] “Establishing standards for effective management information systems for MFIs” by Ramesh S Arunachalam, September 12, 2011, http://www.moneylife.in/article/establishing-standards-for-effective-management-information-systems-for-mfis/19655.html
MicroCapital.org article, September 27, 2011, “MICROCAPITAL BRIEF: Two Papers Released by Microfinance Information Exchange Discuss Impacts of Financial Crises, Reporting Requirements”, https://www.microcapital.org/microcapital-brief-two-papers-released-by-mi…
MicroCapital Universe Profile: Reserve Bank of India (RBI), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Reserve+Bank+of+India+%28RBI%29
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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