CHAPTER – 1

INTRODUCTION

1.1 INTRODUCTION

Microfinance is the provision of a broad range of financial services such as –

deposits, loans, payment services, money transfers and insurance products – to the

poor and low-income households, for their microenterprises and small businesses, to

enable them to raise their income levels and improve their living standards.

Core Principles for Microfinance

The poor needs access to appropriate financial services.

The poor has the capability to repay loans, pay the real cost of loans and

generate savings.

Microfinance is an effective tool for poverty alleviation.

Microfinance institutions must aim to provide financial services to an

increasing number of disadvantaged people.

Microfinance can and should be undertaken on a sustainable basis.

Microfinance NGOs and programs must develop performance standards that

will help define and govern the microfinance industry toward greater reach and

sustainability.

some of the issues in microfinance are as follows:

Sustainability

Lack of capital

Financial service delivery

HR issues

Micro insurance

Adverse selection and moral hazard

But our concern is here with the HR issues. Recruitment and retention is the major

challenge faced by MFIs as They strive to reach more clients and expand their

geographical scope. Attracting the right talent proves difficult because candidates

must have, as a prerequisite, a mindset that fits with the organization’s mission. Many

mainstream commercial banks are now entering microfinance, who are poaching staff

from MFIs and MFIs are unable to retain them for other job opportunities.85% of the

poorest clients served by microfinance are women. However, women make up less

than half of all microfinance staff members, and fill even fewer of the senior

management roles. The challenge in most countries stems from cultural notions of

women’s roles.

And more over the maintenance of the employee details online, with their personal

account which is to be updated and it inturn helps the head office to maintain the

documents. It helps the individual to know their updated status. And one person can’t

access the others account.

1.2 STATEMENT OF THE PROBLEM

Introducing of Orange HRM software assessment for the needs of Nirantara.

Most of the time employees want to know updated status about their leave, salary,

allowances etc. Hence all the above mentioned could be satisfied only by Orange

HRM developed by COSTECH. Hence the requirements of Nirantara are fulfilled by

COSTECH and Orange HRM is to be implemented by Nirantara ahead.

Thus this tries to help the employee to maintain the security and privacy about their

details. And also helps to maintain the updated status at the head office.

1.3 OBJECTIVES OF THE STUDY

Overview of the microfinance industry.

To know and understand how Nirantara functions.

To know the HR dynamics in Nirantara microfinance.

Feasibility study on the implementation of Orange HRM in Nirantara

microfinance.

1.4 SCOPE OF THE STUDY

General study of Nirantara.

Specific study of HR department such as policies, processes, manuals etc.

Review of Orange HRM.

Need assessment of Nirantara with respect to Orange HRM.

Updating HR manual of Nirantara.

1.5 RESEARCH METHODOLOGY

The study was conducted for NIRANTARA COMMUNITY SERVICES in

Bangalore.

Data Collection:

Data was mainly collected from two sources.

Primary data source:

This is the main source from which project related data is acquired. Here, data

is collected from the interaction with the HR manager and the SR.

management. To collect this information, the group discussion was carried out.

The requirement list was prepared by comparing the present scenario and the

features provided by developers. And data is also collected by interacting with

the software vendor {cosTech}.

Secondary data source:

Besides primary sources, data was also collected from the following secondary

sources.

Company records.

HR manual.

Internet.

Documentation of costech.

Magazines.

1.6 LIMITATIONS OF THE STUDY

Following are some of the major limitations which were encountered during the entire

course of the study.

Time was the major binding factor in which the project had to be completed.

Approval of the requirement list by the board.

Availability of costech team.

Features to be provided by costech accordingly with the requirement list

approved by board.

CHAPTER – 2

INDUSTRY PROFILE

2.1 INDUSTRY OVERVIEW

Microfinance is the provision of a broad range of financial services such as – small

savings, loans and insurance products – to the poor and low-income households, for

their micro enterprises and small businesses, to enable them to raise their income

levels and improve their living standards. The concept of microfinance originated in

the mid-1970s in Bangladesh through a pioneering experiment by Dr. Prof.

Muhammad Yunus, then a Professor of Economics, Nobel Laureate. There are two

popular models of Group Lending that are being practiced in India. One is NABARD

promoted SHG Bank Linkage Model and Grameen Bank, Bangladesh pioneered JLG

Model. Microfinance is one of the great success stories in the developing world in the

last 30 years and is widely recognized as a just and sustainable solution in alleviating

global poverty.

The industry began by providing small loans to emerging entrepreneurs to start or

expand businesses. Opportunity International was one of the first nonprofit

organizations to recognize the benefits of providing capital to people struggling to

work their way out of poverty. Over the years, with Opportunity leading the way, the

microfinance sector has expanded its financial service offerings to better meet client

needs. Along with providing more flexible loan products and business and personal

development training, Opportunity offers savings and insurance to help clients

effectively navigate the daily hardships they face. Without these services, clients are

continually at risk of slipping back into poverty because of unforeseen circumstances.

Microfinance organizations make it a priority to serve the particular needs of women,

since a staggering 70 percent of all those living in extreme poverty are female.

Women are often excluded from education, the workplace, owning property and equal

participation in politics. They produce one half of the world’s food, but own just one

percent of its farmland. Nearly 85 percent of Opportunity’s loan clients are women.

While Opportunity gladly extends loans to men, the organization believes the greatest

opportunity for interrupting cycles of extreme poverty come from microfinance

programs that target female entrepreneurs. When women improve their circumstances,

they also improve the lives of their children. By investing in nutrition and education,

they help to create a better future for their children and their communities.

Despite the success of life-transforming microfinance services, the World Bank says

that the industry is not close to meeting the demand. Five hundred million people

living in poverty could benefit from a small business loan and only one-third of the

world’s population has access to any kind of bank account. The lack of access is

particularly severe in sub-Saharan Africa where the World Bank estimates that

microfinance is reaching only a small percentage of the economically active

population. In sub-Saharan Africa’s poorest countries, less than 10 percent of the

population has an account with a financial institution. In response, Opportunity has

committed to building scalable, sustainable and accessible banks throughout the

developing world to provide loans, training, savings and insurance products tailored to

the specific needs of each region.

As the microfinance industry continues to mature, there is a danger that it will drift

toward a more secure client base. It is critical that microfinance organizations

continue to focus on those with the greatest needs–those who have been displaced,

those in rural areas, those who traditional institutions consider unbankable–the most

marginalized people. Maintaining that focus, microfinance can help create a world in

which the underserved have fair access to economic opportunities and the hope to

move beyond poverty.

2.3 MAJOR PLAYERS

Following are some of the major players in Indian Microfinance industry.

SKS Microfinance Ltd (SKSMPL).

Spandana Sphoorty Financial Ltd (SSFL).

Share Microfin Limited (SML).

 Bhartiya Samruddhi Finance Limited (BSFL).

Bandhan Society.

Cashpor Micro Credit (CMC).

 Grameen FinancialServices Pvt Ltd (GFSPL).

BSS Microfinance Bangalore Pvt Ltd (BMPL).

Bandhan Financial Services Pvt Ltd (BFSPL).

Sarvodaya Nano Finance Ltd (SNFL).

Ujjivan FinancialServices Pvt Ltd (UFSPL).

S.M.I.L.E Microfinance Limited.

Saadhana Microfin.

Rashtriya Seva Samithi (RASS).

Aadarsha Welfare Society(AWS)

2.5 CONTRIBUTION TO ECONOMY

Progress can be measured based on betterment in economic status & living standard of

the clients. Their income graph will show positive curves and year by year there is a

progress in terms of production, productivity and net income. 

 

Indicators:

The family of the customer lives in their own house worth INR 100,000 (US$

2,000) with at least tin/asbestos roof, at least 2 rooms and sanitary latrine.

Family members have access to safe drinking water and sanitation facilities.

All children in the family are going to school and have completed at least primary

grades.

Customer is capable to pay minimum weekly loan installment of INR 1,000 or

more.

The Family should have additional income sources – at least two different sources

within the family.

The family maintains average `10,000 ($200) as savings.

If any member of the family falls ill, the family can afford to take all necessary

steps to seek adequate healthcare.

The family is out of clutches of moneylenders and no members of the family is

defaulter.

CHAPTER – 3

COMPANY PROFILE

3.1 BACKGROUND AND INCEPTION

Nirantara Community Services (in short, Nirantara), was conceived in early 2006 by

few like-minded professionals committed to poverty eradication. Their experience in

the development sector, exposure to the microfinance domain and innate social-

entrepreneurial zeal resulted in the establishment of Nirantara during December 2006.

The institution was registered as a Society under Karnataka Societies Registration Act

of 1960 at Bidar on 27th December 2006.

In just two years of its establishment, Nirantara has grown at a rapid pace and plans to

become the most preferred financial institution in the operational area by establishing

the organisation as a highly professional and sustainable financial services provider.

Nirantara has been considered as a most potential start-up institutions in central part of

the country as Nirantara attracted many investors, banks, other financial institutions

and capacity building institutions.

It supports livelihoods of poor families through a powerful tool called microfinance.

Microfinance is not just credit. It also comprises many value-added and need-based

services for poor households including saving services, risk coverage through

insurance, capacity building, enterprise/business development services, etc. Currently

Nirantara is providing micro-credit and micro-insurance products and services. It

serves poor families living in the margin of the poverty line and as of now, is working

only with women members of such families.

Funding and Financial Institutions that it is associated with include Saadhana

Innovative Financial Products & Services Ltd, ABN Amro Bank N.V., Friends of

Women’s World Banking-India, Bharatiya Samruddhi Finance Ltd. (BASIX Group),

KBS Local Area Bank Ltd. (BASIX Group), Indian Overseas Bank, Small Industries

Development Bank of India (SIDBI) and Karnataka State Financial Corporation.

Its roadmap for the immediate future is-

Nirantara will continue to work in urban and semi-urban areas with women

living in the margin of poverty line through geographic expansion and market

penetration.

They will build better customer relationship through simple and efficient

doorstep financial and non-financial services.

Nirantara will strive to build strong and productive strategic alliances for

greater scaling up and outreach that benefit all the stakeholders.

Nirantara will attract key financial institutions, including public & private

sector banks to achieve its vision.

Nirantara will also attract quality human resources and provide a great work

atmosphere for career building. We will employ from the local and external

talent pool and provide them with the necessary training for greater efficiency

and effectiveness.

Thus Nirantara intends to become a reputed brand in Indian microfinance

domain.

1. MISSION STATEMENT

Provide financial services to the underserved segment of the population to

improve their living standards.

To serve the underserved- Nirantara plans to work with the underserved sections

of the society living at the margin (both, a little above and below) the poverty line, as

defined in India. Nirantara believes that for greater financial inclusion, it needs to

cater to the overall underserved segments to make a lasting impact. Nirantara will

continue to work with such population despite client graduation due to the impact of

microfinance.

Through provision of financial services- Nirantara believes that to make a

enduring impact it should focus essentially on providing financial choices to the

people such as micro-credit, micro insurance, micro-savings, micro-pensions and

other such need based instruments. Nirantara will fully focus on greater market

penetration through core financial products and services and at the same time ensure

better customer relationship and client retention.

To improve living standards- Through its core financial services, Nirantara wants

to help its clients to improve their living standards and live a dignified life. The focus

of the organisation here is not only poverty alleviation through financial services but

also to become a catalyst in bringing a positive change in the lives of the poor so that

They can live a dignified life.

2. VISION STATEMENT

Become the most preferred and sustainable financial service provider in

the region positively affecting over 250,000 households by 2013 through a

market-led approach.

Most preferred- Nirantara wants to become the most preferred microfinance

services provider in its area of operation through value added socially driven financial

services. Nirantara would also ensure this through better customer relationship by

greater empathy and a client focused approach. Values of Nirantara will drive it in

becoming the most preferred brand.

Sustainable financial services provider- Nirantara wants to become a sustainable

financial services provider through delivery of need based financial products and

services. The key focus for Nirantara is achieving sustainability to scale up and

provide services to a large clientele and for a long time.

Positively affecting over 250,000 households by 2013- Nirantara plans to reach

out to 250,000 households in the coming five years (2008-2013) to positively affect

their lives through the provision of need based financial products and services.

3. CORE VALUES

Values are the timeless principles that guide an organisation. They set the norms of

behaviour for everybody in the organisation. A strong value system helps in delivering

the whole cluster of benefits the organisation promises to deliver. These values can be

the basis of competitive advantage but this is not the only reason for following them.

Instead values are deeply held beliefs and are meant to be expressed through day-to-

day actions and behaviour of all the employees of the organisation. These are the

guiding principles that preserve our commitment to excellence and sustain our long

term viability forming the architecture of our beliefs as an organisation. The following

core values were identified by Nirantara team members during the strategic business

planning exercise:

Empathy- Nirantara thoroughly understands and responds to the needs of customers.

The organisation will design its products and services as per their need and serve our

target community which will help them in bringing positive changes in their

livelihoods and desired socio-economic changes in their family. The organisation also

understands truthful feelings and circumstances of its workers and it will always

endeavour to provide positive work culture which leads to enhanced commitment

towards achieving mission and loyalty.

Equality- Nirantara will consider all the clients and staff alike irrespective of their

communal classification and opportunities. The organisation will never deny financial

services to an eligible client/group who/which meets policy norms. Any eligible and

deserving staff member will never be deprived of any opportunity on any grounds

such as religion, cast & creed, gender and native place.

Innovation and improvisation- Nirantara will continuously involve itself in

finding creative dimensions through novelty and be involved in continuous

improvisation of products and services. This way Nirantara will add value to services

to the target group.

Timeliness- Nirantara will strive to provide products and services on-time. We value

our commitment towards our borrowers/clients and reciprocate through timeliness.

Team Nirantara will responsibly behave and work to meet timelines.

Credibility- Nirantara will earn trust through delivery of need-based financial

services to the poor community on-time while meeting industry standards and legal

compliance. The organisation will always be transparent & open and thus earn

priceless credibility in the microfinance domain.

Team work- Nirantara’s staff members always demonstrate unity in achieving our

mission. We work as a team to achieve positive social-impact.

Facilitative leadership- Nirantara will lead by example. The leadership of Nirantara

will assist upcoming leaders within and outside the organisation. The leadership will

prove its worthiness through demonstration of the best and ethical practices required

for achieving our mission, and at the same time making the organisation a successful

social-enterprise.

4. KEY OBJECTIVES

To provide, following, to the target community:

Quality need-based financial products & services.

Quality need-based non-financial and socio-economic development services.

To emerge as a brand known for quality services while achieving total financial

inclusion.

5. CODE OF CONDUCT

Nirantara Community Services is committed to preserve the equity of all employees

regardless of sex, colour, race, gender, place of domicile, ancestry, religion, age,

disability, marital status, or sexual orientation. Nirantara Community Services will

strive to give each person equal opportunity and treatment within the organisation.

6. POTENTIAL

Nirantara has proved that the program is scalable and it has been considered as potential

MFI by many leaders/institutions of microfinance sector. We believe that we are

capable to:

Replicate the program efficiently and successfully in other districts of the operational

area and other segments of the Bottom of the Pyramid (BoP).

Learn, adapt and implement best practices quickly to make the whole system process

driven. This is, in fact, helping Nirantara in scaling-up.

Launch other need-based development interventions such as Education. Nirantara is

keen to design and implement other need-based self-sustainable products & services

around microfinance through SEVAS approach.

Create positive social impact by value based operations

BOARD OF DIRECTORS

INTERNAL AUDIT

GENERAL MANAGER OPERATIONS

Chief Finance Officer

HR / ADMIN ACCOUNTS / FINANCE

MIS / IT & CLIENT

INSURANCE

CHIEF OPERATIONS OFFICER

CHIEF EXECUTIVE OFFICER (CEO)

Chief Technology Officer

HR Manager

ASST.

OPERATIONS MANAGER

DIVISIONAL MANAGER

REGIONAL MANAGER SATELLITE SUPPORT CENTER (SSC)

AREA MANAGER

BRANCH OFFICEBranch Manager (BM)

Asst. Branch Manager (ABM)3 to 4-Field Executive (FE) 2-3-Trainee Field Executive

(TFE)

BOARD COMMITTEESRISK MANAGEMENTAUDIT COMMITTEENOMINATION COMMITTEEASSET LIABILITIES COMMITTEE (ALCO)

3.2 ORGANOGRAM

3.3 BRIEF NOTE ON DIFFERENT DEPARTMENTS

1. Human Resources Department

Introduction

HR Department is a key division of the organization. The department basically

facilitates from sourcing of suitable manpower till exit management.

Major Tasks

_ Involvement in HR Planning & Policy Making

_ Sourcing and Recruitment

_ Internal & External Capacity Building for staff

_ HR Inventory Management

_ Compensation/Payroll Management

_ HR Performance Management

_ HR MIS Reporting

_ HR Statutory filing

_ Staff Exit Management

2. Operations Department

Introduction

This is core of any organization. This is the front end and the bridge between the

ultimate Clients and the Management. The department takes care of all the matters

relating to effective delivery of products and services, ensuring proper

implementation and execution of policies and procedures. Thus, plays a pivotal

role in achieving mission and vision of the organization.

Major Tasks

_ Involved in business planning & policy decisions

_ Vertical & Horizontal Expansion & Establishment of operations

_ Identification of right people for program implementation

_ Delivery and Management of financial Products & Services

_ Operations Process Management

_ Internal Controls and Systems Management

_ Communication and Coordination with support departments

_ Community Capacity Building

_ Client Relationship Management / Public Relations

_ Client Feedback Management for new products & services

_ Achievement of good Portfolio Quality

3. Finance Department

Introduction

This is the department which takes care of all the funding requirement of the

organization for achieving its Mission. It does all the necessary activities which

are required to ensure continuous credit supply i.e., from preparation of financial

projections for loan proposals to submission of loan utilization certificates to the

funders.

Major Tasks

_ Involvement in Strategic Business Planning Exercise

_ Preparation of Business Projections including Financials.

_ Sourcing potential lenders, marketing the organization and relationship building

_ Preparation of Loan Proposals, answering to quires raised and necessary follow-

up with banks/financial institutions

_ Post sanction loan documentation

_ Coordination with other departments, especially with operations & accounts for

balancing demand & supply of funds

_Timely submission of reports/documents such as End-Use Utilization Certificate,

Book debts, Auditors Certificates, Monthly Progress Reports, etc.

_ Asset Liability Management

4. Portfolio MIS

Introduction

The Department tracks all the Portfolio related information on day to day basis

and brings out reports required to different stakeholders and all other reports

required by the management for its regular and strategic decision making purpose.

Major Tasks

_ Providing right information to right person at a right time in a right form.

_ Day to day tracking of all portfolio related information branch wise.

_ Consolidation of Branch backups.

_ Preparing Portfolio MIS reports like Progress reports, PAR Reports, Loan

Purpose Statistics etc, at regular intervals at different levels.

_ Training of Field Staff on Using MIS Software.

_ Takes care of Member Insurance.

_ Supporting branches on day to day basis.

_ Closely works with Operations & Other departments.

5. Accounts Department

Introduction

Accounts department is one of key support departments of Nirantara. The

department tracks and documents financial transactions on day-to-day basis. This

department closely works with finance and MIS departments to ensure better fund

management.

Major Tasks

_ Involve in policy decisions pertaining to back office management.

_ Track all financial transactions on day to day basis.

_ Coordinate with other support departments.

_ Support Operations in daily transactions.

_ Support HR Department in Payroll Management.

_ Making repayment to lenders.

_ Preparation of Financial Statements and reporting.

_ Making all statutory payments.

_ Working with Statutory Auditors.

_ Training to staff on accounts related aspects.

6. Internal Audit & Control Department

Introduction

Internal Audit is an independent examination / checking system to ensure proper

implementation and execution of policy and procedures of the organization. The

dept. identifies the root cause of the problem and suggests corrective and

preventive actions, which ensures organization be able to avoid potential issues

and help achieve its objectives. The Department does the audit of all the activities

of branches and field operations and reports regularly to CEO.

Major Tasks

_ To check proper implementation and execution of Policies of the Organization.

_ Randomly visit all the branches.

_ Audit of all Field Activities and Branch Activities / reports.

_ Reporting Mistakes / problems to supervisory staff and get it corrected.

_ Doing compliance audit.

_ Identifying the frauds and reporting the same to the Management.

_ Supporting the Operations Department to run the activities effectively and

efficiently.

3.4 NATURE OF BUSINESS

Nirantara is in the business of poverty reduction through use of a powerful tool called

microfinance and credit activities. They support livelihoods of socio-economically

backward families. They provide micro-credit and micro-insurance services to women

organized in to groups and centers. Through these need-based products and services,

They are trying to graduate people to the mainstream formal financial services. In

other words, They are trying to create financial inclusion with their products and

services.

3.5 OWNERSHIP PATTERN

Promoters

Mr. Niranjan Sheelavant

Mr. Hassan Mohiddin Mulla

Governance

Nirantara believes in very strong, transparent and effective governance as it

helps in healthy escalation of our company. As a SEVAS (Social Enterprises

for Value Added Services), Nirantara is planning its geographical expansion to

reach over a million socio-economically backward families in coming five

years. In this connection, governance plays a significant role in achieving

mission & vision of the company. They are in the process of formation of an

Advisory Board and Board of Directors with considerable experience &

expertise in banking, microfinance & development sectors.

Advisory Board

Nirantara NBFC’s Advisory Board consists of exceptionally recognized

personalities of microfinance sector. The Advisory Board consistently guides

Board of Directors and Senior Management of the Company.

Mr. N. Srinivasan

Board of Directors

The Board consists of Directors from different stream of investors. Promoters

and Institutional Investors invest equity directly whereas member-borrowers,

staff and friends of Nirantara (individuals) invest equity indirectly, through

separate Mutual Benefit Trusts. MBTs nominate their representatives to the

Board of the Company. 

Mr. Raj Kamal Mukherjee, Non-Executive Director

Mr. Niranjan Sheelavant, Managing Director and Chief Executive Officer

Mr. Hassan Mohiddin Mulla, Director

Management

Nirantara has an experienced management team. The second line management

is competent enough to take care of day to day operations. There is a Core

Management Team which coordinates and overseas all the functions of the

organization.

3.6 AREAS OF OPERATION

Presently They are working in 5 districts of Karnataka state, India. Their operations

are predominantly in urban and semi-urban areas, as of date. However, They are

expanding to rural areas on a faster pace. BY March 2015, Nirantara will have its

presence in 5 states of India. Nearly 40% of the area’s population lives in miserable

poverty, and the rates of hunger, malnutrition & disease are among the highest in the

world.

This area has common characteristics such as:

– high population in Below Poverty Line (BPL) category.

– high landless population.

– high rate of migration to urban areas.

– low rainfall, long dry-spells.

– regular droughts and floods.

– high rate of suicide by agrarian community.

– market distress and low literacy.

Most of the districts in this region appear in top-200 backward districts of the country.

The vast majority of poor in these districts are landless labourers or marginal farmers

who survive through subsistence agriculture in rural parts. Urban part has

economically active distressed population with lack of livelihood opportunities and

lack credit supply for their tiny enterprises. Distressed rural population migrates &

settles in urban areas for livelihood options and this creates lot of issues including

basic infrastructure, water & sanitation and this leads to creation of slums.

They consider people who lack access to formal finance and support them through

their financial services. They are currently working only with women and cover men

folk subsequently. Hence, Nirantara is working / will work with economically active

population in urban & peri-urban areas living in the margin of poverty line.

3.7 OPERATION METHODOLOGY

Nirantara is replicating pioneering Grameen Bank System with local modifications.

They facilitate formation of Joint Liability Groups (JLGs) of 5/10 members and such

3/6 JLGs form a Centre. The Centre meets on weekly/fortnightly basis in fixed place,

day and time to do financial and non-financial transactions. They provide all the

financial services at the doorstep of the clients.

Branch Office Structure:

3.7 PRODUCTS AND SERVICES

PRODUCTS

Income generation loan

Loan size: Max 8,000/- 12,000/- and 16,000/-during first 3 cycles respectively.

Loan cycle: 50 weeks

Rate of Interest: 15% flat

Other charges: Membership Fee-100/- , Loan Management Fee-2% of loan,

Insurance Premium-100/-, Insurance Service Fee-50/-.

SERVICES

Micro-Credit 

Nirantara Community Services is offering micro-loans for legal income generation

activities. Loans are given broadly under Agriculture-allied, Production, Trading,

Services (including transportation) sectors.

Product ParticularsIGL Weekly

Repayment

IGL Fortnightly

Repayment

Loan Size 8,000/- to 20,000/- 8,000/- to 20,000/-

Term 50 weeks 72 weeks

Installment Frequency Weekly Fortnightly (Once in 14 days)

No. of Installments 50 36

Installment Amount

(P&I)Rs. 23 per 1000 per week Rs. 34 per 1000 per week

Interest Rate Charged 15% Flat 15% Flat

Loan Processing Fee 2% 2%

Client Enrolment Fee Rs. 100 Rs. 100

Pre-payment Allowed Allowed

Micro Insurance 

The Company has tied up with Life Insurance Corporation of India & Birla Sunlife

Insurance Company. It has covered all borrowers and their spouses with life

insurance. The claim arises in the event of the death of the client & her spouse.

Insurance fee depends on the loan amount and ranges from `150 – 250.

Other Services

The Company is soon launching additional products and services for Income

Generation needs apart from new loans for Water & Sanitation, Housing and

Education needs. The Company is also planning to launch Individual Lending

Program in urban areas. Watch out for updates on this.

3.8 CUSTOMERS PROFILE

The typical microfinance clients are low-income persons that do not have access to

formal financial institutions. Microfinance clients are typically self-employed, often

household-based entrepreneurs. In rural areas, They are usually small farmers and

others who are engaged in small income-generating activities such as animal

husbandry and petty trade. In urban areas, microfinance activities are more diverse

and include service providers, traders and producers, artisans, etc.

Access to conventional formal financial institutions, for many reasons, is directly

related to income: the poorer you are, the less likely that you have access. On the other

hand, the chances are that, the poorer you are, the more expensive or tedious informal

financial arrangements. Moreover, informal arrangements may not suitably meet

certain financial service needs or may exclude poor anyway. Individuals in this

excluded and under-served market segment are the clients of microfinance.

So far Nirantara have reached & impacted 10,212 members and have disbursed 20,216

loans worth Rs.18.48 Crores (US$ 3.98 millions). They work directly with socio-

economically backward women. Through them, They support their family members.

They work with those communities who lack formal financial services and those who

are in the grips of moneylenders. The business model creates opportunities to the

women and enables them to operate their own productive economic activities and also

to support their family. 

3.9 COMPETITORS PROFILE

Within the microfinance industry, there are many players in the market. The most

dominant ones are:

SKS Microfinance Ltd

The company is head quartered at Secunderabad, Andhra Pradesh. Legal status

is NBFC private limited. Lending model is joint liability group itself. Number of

branches till date are 2029, members 68 lakhs, amount disbursed: 18227 million

approx.

Spandana Sphoorty Financial Ltd

The company is head quartered at Hyderabad, Andhra Pradesh. legal status

public limited company (NBFC) , joint liability model, Number of branches till date

are696, members 16 lakhs, amount disbursed: 11987 million approx.

BSS micro finance private limited

It is Head quartered in Bangalore. As of 31st March 2009, They have Fifty

Group Lending field offices and one Individual Lending pilot branch spread over the

districts of Tumkur, Bangalore Rural, Mandya, Mysore, Chamarajnagar, Kolar,

Chikkaballapur, Hassan, Ramanagaram, Chittradurga, Chikkamagalur and

Shivamogga. They work mostly in villages all around the field offices, including the

towns where the field offices are located.

Cashpor Micro Credit

The company is head quartered at Varanasi, uttarpradesh. legal status section

25 company, joint liability model, Number of branches till date are247, members

303935, amount disbursed: 1431 million approx.

Bandhan

The company is head quartered at Kolkatta, west bengal. legal status society,

joint liability model, Number of branches till date are385, members 851713, amount

disbursed: 3389 million approx.

3.10 SWOT ANALYSIS

Strengths:

o Efficient and responsible staff in the company.

o Provides loans to unprivileged and Customers are targeted well.

o The company is into education sector too.

o MFI advantage over other financial institution as They reach clients at

their doorstep.

o Less documentation as whole group is jointly liable this makes people to

get faster disbursement of loans and good success rate of repayment.

Weakness:

o Clients live in competitive markets many players.

o High cost delivering of micro finance loans.

o Death of the clients spouse will cause great loss as spouse is covered.

o More efficient technology to be added.

o Industry yet to improve on regulations.

Opportunities:

o Industry in its growth.

o Better products and innovation will increase demand.

o Lot of population yet to be covered.

o More customized loans to be designed.

o Leverage of best practices from industry to overcome constraints.

Threats:

o Climatic change will affect the clients and disaster prone too because of

irregular income due to poverty.

o Productive utilization of loan may not happen.

o Government rules will affect to a large extent.

o Company should not be owned by politicians or fraudulent people.

o Should get funds adequately.

CHAPTER – 4

ANALYSIS

4.1 MANAGEMENT INFORMATION SYSTEM? (MIS )

A management information system (MIS) is a system or process that provides

information needed to manage organizations effectively. Management information

systems are regarded to be a subset of the overall internal controls procedures in a

business, which cover the application of people, documents, technologies, and

procedures used by management accountants to solve business problems such as

costing a product, service or a business-wide strategy.

Management information systems are distinct from regular information systems in that

They are used to analyze other information systems applied in operational activities in

the organization. Academically, the term is commonly used to refer to the group of

information management methods tied to the automation or support of human decision

making, e.g. Decision Support Systems, Expert systems, and Executive information

systems. For any organization’s success, MIS plays key role. MIS is not simply a

computer program, and it involves more than just calculating numbers. Information

management is first and foremost people communicating with one another about

events that affect the work of their organization.

MIS in MFI’s

There is no doubt that “the right information” at “the right time” at “the right place”,

is crucial in decision making. Therefore, information and data is considered among

the most valuable assets fundamental to the success of an organization. The primary

roles of the MIS are to capture information, create new information, store

information, and convey information to the user.

The two major objectives of MFIs are Outreach and Sustainability. MIS can add

substantial value in achieving both the objectives.

A major advantage of MIS is that it provides easy access to accurate and up-to-

date information.

Activities, such as disbursements, repayments, deposits, withdrawals and

money transfers are completed faster, better controlled and with minimum

opportunity for errors.

Use of MIS helps make MFI services more interactive, accessible and

transparent.

In terms of innovation, MIS provides full flexibility to structure products and

services to the needs of its target group.

Efficiency and productivity of staff is increased, as They are able to manage

more products, customers, and transactions in less time.

INFORMATION SYSTEM USED BY MFI.

The microfinance sector is also quite diverse in its use of information systems.

Generally there are the following three types.

Manual System

Some MFIs still rely on manual systems, which involve maintenance of records

in forms and ledgers. Organizations having manual systems are either small

Micro-credit programs or NGOs.

Semi-automated System

More than 50% of MFIs are operating in a semi automated mode. Within this

category, the spreadsheet is the common tool being used either in conjunction

with a manual system or with an MIS application that does not fulfill the

information requirements of the MFI. The majority of non-regulated MFIs have

semi automated systems.

Fully Automated System

Few MFIs are fortunate enough to have a fully automated and integrated MIS

fulfilling the whole information requirements of the organization. Such systems

are existent with banks or regulated MFIs.

4.2 ROLE OF GRAMEEN FOUNDATION

 Grameen Foundation’s global network empowers the world’s

poorest people, mostly women, to lift themselves out of poverty

through microfinance, a proven poverty reducing strategy. Using

tiny collateral-free loans (often less than $200) and other financial

services, microfinance clients build small enterprises and new

futures for their families. Since 1997, the GF network of microfinance institutions

(MFIs) has impacted an estimated 34 million lives in 28 countries across Africa, the

Americas, Asia, and the Middle East.  Grameen Foundation's mission is to enable the

poor, especially the poorest, to create a world without poverty. 

Mifos was launched in 2006 by the Grameen Technology Center, which is dedicated

to helping microfinance reach its full potential by driving industry-changing

innovations that increase the efficiency of MFI operations, create new microbusiness

opportunities for the poor, and provide telecommunications access for the world’s

rural poor.

 

4.3 MIFOS AND ITS NEEDS.

 Mifos is a web-based management information system (MIS)

leveraging a centralized open source technology platform to provide

microfinance institutions streamlined operations, real-time

information, and the robust capacity to scale. The system provides the

precision and agility needed to operate more efficiently and the business and social

insight to drive broader and deeper outreach to the poor.  As the core backbone of an

MFIs operations it provides portfolio and transaction management, on-the-fly

financial product creation, in-depth client management, integrated social performance

measurement, and a reporting engine to provide financial transparency and business

and social insight. Despite the remarkable impact of microfinance institutions around

the world, there are still over 1.6 billion adults in need of financial services.

One of the factors inhibiting microfinance institutions from extending their reach is

the lack of a flexible, cost-effective technology infrastructure that will allow them to

expand their operations to provide loans to more people and to develop new products

and services. Purpose-built for the microfinance industry, Mifos is a centralized

management information system (MIS) platform featuring a user-friendly browser-

based web interface running on top of a robust MySQL database. 

Flexible to meet your unique operational requirements and scalable to meet your rapid

growth and outreach, our centralized model enables real-time access to data across

your organization from any web browser.  All key functionality is met including client

management, loan and savings portfolio management, transaction processing, and

social and business reporting & analytics.

NEED FOR MIFOS

There exist a number of off-the-shelf MIS (Management Information Systems)

available today, however just half of all microfinance institutions around the world

have implemented automated systems. The rest are still using Excel-based or manual

systems to manage their portfolio and client information, severely hindering their

efficiency and capacity to support growing numbers of clients. Those that do invest in

technology spend duplicative resources on custom-built systems that are extremely

costly and difficult to maintain.

Although regional differences and variations in financial models exist and must be

accommodated in the automated information systems, a large portion of the

functionality required is common to the vast majority of MFIs. This means that money

is being spent by MFIs around the world to develop the same functionality over and

over again – money that can be better spent to directly benefit the poor.

Mifos provides a solution to this problem. By building world-class microfinance

software using open source technology, the common functionality in areas such as

management and reporting can be standardized and shared by everyone. Innovations

in microfinance technology can be scaled. Modifications can be developed in

partnership with others in the microfinance world, rapidly increasing the ability of

MFIs to extend their outreach to those in need.

4.4 ADVANTAGES OF USING MIFOS

Efficiency & Ease of Use.

Social & Business Impact.

Growth & Scalability.

Transparency & Insight.

Security & Data Integrity.

Intimacy & Outreach.

4.5 DISADVANTAGE OF USING MIFOS INSTEAD OF ORANGE HRM

It’s just a portfolio tracker.

It keeps the core function intact rather than making general.

All the necessary features can’t be added.

Comparatively it’s not consistent.

It has its own limit.

Its time consuming.

Its resource consuming.

And it can be just used as the link with the Orange HRM.

CHAPTER – 5

INTERPRETATION

5.1 ROLE OF COSTECH

This is a company run by young Technocrats. They build software with an eye

for detail and ease-of-use. Their commitment to customers is only matched by

their commitment for building quality software. They quote “We love what we

do...and it shows in our work”.

THEY BELIEVE IN ...

Usability above all. Any software that requires days of training is simply not worth

having. They pride themselves on building software that is both intuitive and reliable.

Answering only to Customers and the Open Source Community. They are not

funded by external Investors, customers pay for day to day operations, while not

working with customers they actively collaborate with the Open Source Community

towards the goal of building better software.

Freedom from contracts. They don't believe in restrictive contracts and have utmost

respect for customer’s preferences.

Affordable Software. Charging tens of thousands of dollars for software is vulgar

Doing everything with passion. They are a small group of inspired individuals who

look onto software development as an art form. They are passionate about technology

and the same is reflected in their work.

THEIR PHILOSOPHY

Keeping it simple. They don't waste money on costly proprietary software or

unnecessary services and try to inculcate the same values in customers.  

Open Source and Open Hearts. They offer special pricing for Social enterprises and

provide consultancy services for start ups in this field in a bid to reduce their

operational costs.  

Staying Lean and Hungry. They don't aspire to be the next big Software services

firm employing thousands of associates. They are focused on staying lean, having a

distributed work environment and keeping operational costs minimal.

Honesty above all. They believe that relationship can be sustained only by mutual

trust. They promise and deliver to customer’s great service, quality solutions, honest

pricing, and respect for time.

FEATURED SERVICES

Orange HRM is a open source Human Resource Management

(HRM) business solution for the Small and Medium-sized Enterprise

(SME) by providing a flexible and easy to use HRM system affordable

for any company worldwide. It is emerging in line with the new

generation of HR Information Systems (HRIS) and will assist in managing company's

most important asset - human resource. Based on modular architecture, this

comprehensive Open Source solution reflects the main areas of HR Management from

simple personnel administration to today's complex strategic approaches.

SERVICES

Installation and migration of existing applications to Orange HRM

Customizations for Organizational needs

Option of public trainings and onsite private trainings.

Production support

5.2 ABOUT ORANGE HRM

The project was started during fall 2005 and the first beta release was made in January

2006. Today Orange HRM has users worldwide enjoying a free, stable and highly

usable HRM solution. The system is backed by professional support and services as

well as a fast growing, receptive and knowledgeable worldwide open source

community. By building and leveraging this community of users, developers and

partners, the usability, scope and international adoption of Orange HRM is

continuously being improved.

Orange HRM, which is applicable to diverse business industries, By providing

modules for personnel information management, employee self service, leave, time &

attendance‚ benefits and recruitment companies are able to manage the crucial

organization asset – people. The combination of these modules into one application

assures the perfect platform for re-engineering and aligning HR processes along with

the organizational goals and redefining the workflow operations of HR professionals,

paving the way to a new level of HR Management. Easy to install and easy to use. It

facilitates a vast range of HR features which will match the requirements of the

company’s main HR management activities.

ABOUT ORANGE HRM LIVE

The world’s first open-source web-based HR Management application. Orange HRM

Live gives the combination of a feature rich cloud based HRMS and Open-Source

model which gives freedom and flexibility.

Briefly, Open Source software refers to programs in which the source code is

available to the general public for use and/or modification from its original design,

free of charge. Open Source has evolved as a flexible low cost alternative to

proprietary software owned by corporations. Typically Open Source software is

created as a collaborative effort in which programmers improve upon the code and

share the changes within the community. A great benefit of Open Source Software is

the profound collaboration and increased transparency which leads to better

communication with the users.

With Orange HRM developers strive to develop a large community of both

programmers and HR professionals, who can contribute to make Orange HRM the

best Open Source HRM system in the world.

5.3 REQUIREMENTS OF NIRANTARA

1. ADMIN------------------

Company info--------

General.

Locations.

Company structure.

Jobs----------------------

Job titles.

Job specifications.

Pay grades.

Employment status.

EEO job category.

Qualification-----------

Education.

Licenses.

Skills---------------------

Skills.

Languages-------------

English.

Kannada.

Hindi.

Marathi.

Users--------------------

HR admin users.

ESS users.

Admin user groups.

Email notification-----

Configuration.

Subscribe.

Project info--------------

Customers.

Projects.

Project activities.

Data export/import-----

Define custom export.

Export.

Define custom import.

Import.

Custom fields.

2. RECRUITMENT------

Job vacancy.

Application.

Status.

3. PIM----------------------

Employee list.

Add employee.

4. TRAINING-------------

Types of training.

Feedback.

5. PAYROLL--------------

Salary.

Allowances.

Incentives----------------

Case load managed by FE.

New groups formed.

Portfolio at risk.

Mentor assessment.

Deductions-----------------

Statutary deductions. (PF,ESI,PT,TDS).

Rental contribution.

Loans and advances.

Travel reimbursement.

Mobile reimbursement.

Pay slip.

6. PERFORMANCE------

KPI list.

Add KPI.

Copy KPI.

Add review.

Search review.

7. BENEFITS--------------

Gratuity.

Bonus.

Maternity.

Insurance-------------------

WC.

GPAI

Marriage allowance.

Festival.

Food.

Leave travel.

Loyalty allowance.

PF.

ESI.

8. REPORTS----------------

HR weekly report.

HR monthly.

HR quarterly.

Pf monthly filing (form 5-10) and Annual filing (form

3A-6A).

ESI monthly filing and Semi annual filing.

PT monthly and annual filing.

HR services.

TDS quarterly filing (form 16-16A).

Staff salary details with A/C number.

9. LEAVE--------------------

Attendance.

Define leave types.

Leave summary.

10. BUG TRACKER.