Cankerworms in Microfinance Institutions Finally Checkmated
Tunde Raji - September 17, 2017

It is no more news that redundant performances of marketers and field officers in microfinance institutions across the globe have been checkmated through mobile financial technology. The good news is that many microfinance banks and other financial institutions in Nigeria are growing and developing swiftly at a steady pace through embracement of mobile financial technology in paying and collecting money from their respective clients.

 

Prior to invention of financial technology, it was worrisome and counter-productive to experience marketers and field officers abandoning their core duties which were being for, to pursue their personal businesses for selfish interests. It is even more suicidal to collect monies meant for loan repayment from customers, or daily remittances without remitting into the bank coffers because there was no tracking system in place.

 

Over the years, this abysmal performance of field officers and marketers of microfinance institutions recorded low productivity due to under-utilization of human resources. Hence, it resulted in low profitability margin or consistent losses over a period of time.

 

In practical terms, during my active service as an employee in microfinance banks at management level, I witnessed and experienced different scenario which led to many of these personnel being laid off as a result of financial malpractices. Some of these corrupt personnel implicated and exposed themselves through ostentatious and extravagant lifestyles.

 

The most annoying scenario was when I was multi-tasked to head the Finance & Credit department in 2015. One of our bank drivers reported to me in confidence that he usually take one of the marketers to his fiancé residence during official working hours at the bank’s expense.

 

In addition, female marketers habitually used the official vehicle assigned for marketing to shop for foodstuff at local markets intermittently.

 

Often times, marketers and field personnel indirectly borrow money from the bank without any interest. This is done by not remitting to the bank in full all monies collected through default customers (Delinquent and Bad loans) as at when received. The monies are channeled to meet their personal financial commitment. In today microfinance practice, all these ugly incidences have been checkmated through mobile financial technology in real-time.

 

As a microfinance practitioner, in craving for how to continually contribute to the growth and development of microfinance banks in Nigeria, I had an encounter with Mr. Mike Nwaogu, the CEO of CellCore Ltd who specialize in a branded mobile app technology (PAYCOLLECT) for microfinance institutions in Nigeria and across Africa. He stressed that PAYCOLLECT can be used for deposits, withdrawals, account creation, Know-Your-Customer (KYC), Short Messaging Service alert (SMS), and Microloan management on the online portal. Further, he said that the cost effectiveness and affordability of PAYCOLLECT makes it standout from the competition, and no hidden cost is charged.

 

In a recent article publication, Nwaogu (2017) states that the potential of PAYCOLLECT app is limitless as it harnesses the potential of becoming the cutting edge product in microfinance industry for the banked and unbanked clients.

 

Conclusively, the pivot or lifeblood of all microfinance institutions is Marketers and Field personnel. They are likened to a King in the game of Chess because of their crucial role in income generation. Their activities are now closely and properly monitored using a tracking system through mobile application technology in real time.

 

The deposits base, the loan repayments, daily remittances, and other specialized accounts will increase in volume which will pave way for liquidity to invest in other income-generating ventures. The resultant effect of this innovative technology is tremendous high profitability to microfinance institutions.

 

15 thoughts on “Cankerworms in Microfinance Institutions Finally Checkmated”

    1. Emmanuel, thanks for your response and question.
      Ans: No, the app doesn’t perform the role of a field agent, but it facilitates everything the field agent does on the field with complete accuracy, timing, transparency and efficiency.

      The app is a Field agent’s companion. Its a Field agent’s complete toolset. It helps him do his job faster, more transparently, and more efficiently.

  1. Great.This article is fantastic.The fact is that marketers and field officers have done more bad than good in previous years speaking from experience.Thank God for technology.
    Please i like you to educate us more on the PAY COLLECT APPS

    Thanks
    Gideon

    1. Ans:
      PAYCOLLECT is a good service for cooperative societies, micro finance banks and even thrift collectors. It appears to be a miniature banking system-as-a-service without the major features.

      It allows field agents of these financial institutions to carry out the business of collections/deposits for daily contributions, withdrawals or disbursement of micro loans, account creation for new customers and allows agents to view their performance daily.

      It also allows the bank’s administrator back at the office to view transactions performed by the Marketers & Field officers in real-time.

      It is a good service, it costs a nominal fee monthly, and you can scale up easily.

  2. In my years of experience in microfinance banking,marketers and field officers are mostly not well paid among the staff salary structure in most MFB’s.There is no how technology will eradicate cash suppression completely,it can only curb it because microfinance banking is different from the conventional banking in that in microfinance banking the field officers are closer to the customers than the organisation.The issue to be addressed first in MFB should be salary structure of graduate marketers.Field officers in MFB are facing pressures of loan recovery and meeting targets because of the nature of their kind of customers than their contemporaries in commercial banks and they are not paid anything close to the ones working in commercial banks.Management of MFB will rather open a new branch after generating income than to review the salary structure and staff compensations of marketers generating the income.The operations and management staff of MFB’s sitting down in the office are paid more than the marketers generating the income most times.There should be a basic salary structure for graduate marketers so as to avoid the temptation of cash suppression.From my findings,graduate marketers in most MFB’s are paid nothing less more than 60k or less which is nothing in this economic recession.A marketer facing a pressure of being evicted from the house and receives payment from a delinquent customer will be tempted to settle its personal needs first just like the way management does too.I recommend a salary structure of nothing less than 85k for graduate marketers after being confirmed after the probationary period and this will curb cash suppression.

  3. My experience in microfinance banking,marketers and field officers are mostly not well paid among the staff salary structure in most MFB’s.There is no how technology will eradicate cash suppression completely,it can only curb it because microfinance banking is different from the conventional banking in that in microfinance banking the field officers are closer to the customers than the organisation.The issue to be addressed first in MFB should be salary structure of graduate marketers.Field officers in MFB are facing pressures of loan recovery and meeting targets because of the nature of their kind of customers than their contemporaries in commercial banks and they are not paid anything close to the ones working in commercial banks.Management of MFB will rather open a new branch after generating income than to review the salary structure and staff compensations of marketers generating the income.The operations and management staff of MFB’s sitting down in the office are paid more than the marketers generating the income most times.There should be a basic salary structure for graduate marketers so as to avoid the temptation of cash suppression.From my findings,graduate marketers in most MFB’s are paid nothing less more than 60k or less which is nothing in this economic recession.A marketer facing a pressure of being evicted from the house and receives payment from a delinquent customer will be tempted to settle its personal needs first just like the way management does too.I recommend a salary structure of nothing less than 85k for graduate marketers after being confirmed after the probationary period and this will curb cash suppression.

    1. Ladi, the introduction of mobile app technology makes it possible to monitor all financial activities of marketers and field officers in real-time.

      The back office IT staff or Operations personnel, or Managing Director are able to view how money is being collected, and how money is being disbursed. (Amount, Time, and Customer’s credentials)

      It is inevitable for marketers and field officers to complete financial transactions without client’s authentication

    2. Ladi, as regards your recommendation of N85,000 as minimum salary package for graduate marketers, don’t you think it is still meagre to meet the needs of graduate employees in this inflationary economic dispensation?

      In the absence of financial mobile app technology (ceteris paribus), do you think N85,000 will deter graduate employees from financial malpractices?

      1. It won’t deter or eradicate graduate employees from financial malpractices but it will curb it.Technology is a good idea to monitor payments and cash collection but staff welfare in MFB’s should be addressed too.The future of world economy is in SME banking especially in developing countries.So why are the human capital involved in this evolution not being elevated compared to their contemporaries in conventional banking?Management in MFB’s will rather spend money on technology and opening new branch than to address the issue of staff welfare.The management notion will always be no matter how the income generated,our staff is a micro finance staff and they should be paid like that and this makes the staff not to perform optimally because they are always have it in mind the job is temporary and not permanent.I totally agree with you,technology to monitor repayments is a very good idea and MFB’s should embrace this change.

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