Microfinance Thrives When Face-to-Face Rapport Meets the Cloud

Imagine you're an entrepreneur with the drive and passion to build a product that can compete with the best of Silicon Valley’s technology. Yet you can’t secure funding. Not because your product isn’t good, but because you’re located in a developing country where securing an investment for your business venture is difficult to nearly impossible.

How do the creative minds in developing countries, far from the famous hubs of entrepreneurial activity, get access to funds so they can grow and expand their business?

That’s the problem French investment company MicroCred wants to solve. MicroCred’s answer has been twofold, and we couldn’t be successful without a lot of help from the cloud.

First, we built an extensive network of financial service affiliates who share our mission: to expand economic development opportunities for micro and small to mid-sized clients and improve the living conditions of their families. Each local affiliate chooses it’s own mission and objective based on local product needs and regulations.

MicroCred brings a global framework its partners can plug into: systems, procedures, and standardized processes proven to work for the entire network. We focus on financial information and reporting systems, which we worked hard to standardize to ensure quality across all countries in the global network.

That’s easier said than done since each of MicroCred’s affiliates and their economic conditions are unique. How does one quickly evaluate an entrepreneur's business plans and credit worthiness in an emerging market half a world away?

That’s where the second element comes into play: the power of quickly crunching numbers and pushing them out to all members. We analyze global data gathered in a timely fashion to make strategic and management decisions on where to focus our attention. Yet before the magic of big data can kick in, it often takes a face-to-face meeting at the end of a dirt road.

Take Clar Orlondon Ralasioa of Madagascar. After 10 years in chocolate production, he decided to start his own chocolate factory. He could secure a loan only after the CEO of MicroCred Madagascar met him in person, then received funding from MicroCred Madagascar to acquire machinery and complete the construction of his factory.

This hands-on process demonstrates the challenges facing affiliates of MicroCred in reaching out to potential clients, and how these interactions help evaluate their needs so we can service them better. Had there been a system for MicroCred Madagascar to evaluate Clar’s application faster, he could have started his expansion earlier.

The biggest challenges have always been the speed and way decisions are made by our local affiliates in providing our financial product, while adhering to MicroCred’s standards. Local partners needed better tools to input and access information about both local and highlevel financial trends.

Take our current “Smart Campaign” to ensure credit is extended only to borrowers that have demonstrated adequate ability to repay and currently do not have excessive debt. Our loans also must be priced in such a way to ensure our clients can afford them. It guarantees MicroCred affiliates make the right lending decisions and remain sustainable.

Cloud business intelligence from BIME Analytics allows us to perform on demand analysis of local customers and comb through high-level finance trends. Before deploying a powerful yet simple cloud service that runs in a browser in Paris just as smoothly as in Madagascar’s capital Antananarivo, we struggled with reconciling and digesting many data sources.

We relied on management reports from around the globe and tried to square them with financial trends from national and local sources. Add to that the fine grained assessments of clients flowing in, and you begin to understand the size of the challenge to lift microfinance into the age of Big Data.

Today, our far-flung teams are plugged into the same data stream, in equal measure creating and consuming data as they go about their business. That way, they can get the fastest, most accurate insights into our global business, drill down to the local level or zoom out to get a read on important regional or international trends. All that information is dynamic. It flows up and down the branches of MicroCred’s network and populates live dashboards.

Soon, we want to take this idea even further and deploy a system that lets us rapidly compile and dig into local data, run that data through smart tools to benchmark it against global best practices and macro-trends, and quickly push those insights down to local partners so they can make the best decisions. It would extend the ability to make data-driven credit decisions to microentrepreneurs in many emerging markets for the first time.

Development opportunities and microfinancing start with big data, cut down to the size and unique needs of each emerging market. This approach enables managers and analysts at headquarters as well as any affiliate at the end of the dirt road to make decisions better and faster. Face-to-face combined with a tether to the cloud makes, in my opinion, the difference between simply having an idea and turning it into a growing venture that provides jobs and self-esteem.

Denis Moniotte joined MicroCred in December 2009, bringing on board his delivery experience of IT solutions for financial services. He was promoted to head of Alternative Delivery Channels in July 2013. Prior to joining MicroCred, Denis was a consultant at Accenture, in the Industry and Functional Solution Unit.