Microfinance institutions play a crucial role in lending credit to small-scale businesses, entrepreneurs, underserved families, and other small to medium-sized businesses. Serving the small-scale business can be a tough task for the microfinance institutions, as the loan amount is high and there are chances of errors and mistakes. Automation in the microfinance software for the small-scale business is very effective in smooth loan processing without any room for errors or mistakes.
In this blog, we will talk about how Microfinance Institutions Can Scale With Automation and the benefits of using automation for microfinance institutions.
Understanding automation in microfinance
Automation allows systems to handle repetitive and critical tasks without manual effort. It automates data verification, document checks, KYC, credit checks, and other processes, eliminating the need for human intervention. Microfinance institutions can use this automation to streamline repetitive tasks and make sure that everything goes smoothly.
The need for MFIs to use automation for scaling the business
It is highly important to integrate automation in the lending system used by the microfinance institution. As the business grows and more customers want to buy loans, automation helps to process the new applications without delaying the process and making customers wait for long hours. Automation relieves the burden on the employees and loan approval, and disbrual are done in minutes.
What are the key ways by which automation helps the Microfinance institution scale up
Quick loan processing
Loan processing speed improves with automation. Manual processes take a lot of time for the loan approval and disbursal. With automation, the whole process is completed in less time, and the customer gets quick loan approval and disbursal. One of the top reasons for the benefits of automation is its ability to complete all the steps in the loan lifecycle in less time. Financial IT has stated that the digital technology adoption has reduced the loan processing time by up-to 80%.
Improved Accuracy and Error Reduction
Manual data entry is liable to errors. A tiny typo or missing document might cause incorrect credit choices or processing delays. This can cause money losses and a bad customer experience. Customers can become disloyal to the banks. Automated systems take away plenty of this human error.
- Validate borrower data mechanically.
- Check files using Optical Character Recognition (OCR).
- Apply standardized criteria to assess creditworthiness.
This is not the most effective makes operations more accurate, additionally, extra consistent and reliable.
Easy Risk Management
Automation helps the bank to judge the customer’s repayment capacity with data analytics and AI. It helps banks and microfinance institutions to reduce the risk of NPA and helps banks to decide the creditworthiness of the customer. Loan management software provides a quick history of the client’s financial behaviour that was not there when the loan processing was manual. It helps the banks and microfinance institutions to manage the risk more effectively and take better steps in providing loans securely.
Best customer experience
Automation provides the best customer experience. Loan software makes sure that customers receive timely and quick updates about the loan application. They can also sit at home and easily manage the application and repay their loan. They do not have to revisit the bank again and again to get their work done.
Reduced operational cost
One of the top benefits of automation is lower operational cost. You need fewer physical workers when you have automation. Microfinance institutions can save money through automated processes that require minimal human intervention, allowing them to invest in making their services more accurate and reliable.
Cover every section of society
Automation helps to cover the areas that are remote and far from the city. . Automation can easily be blended with the technology, allowing MFIs to serve these areas without problems.
- Automation helps borrowers to submit their loan application remotely without visiting the branch.
- Make repayments from the comfort of their home.
- Receive notifications and guide digitally.
This dramatically expands the potential reach of microfinance services and helps economic inclusion for extra humans.
What are the top benefits of adopting automation for microfinance institutions?
| Benefits of automation for MFIs | Advantages |
| Quick loan disbursement | Loan approvals in minutes or maximum hours. |
| Reduced operational cost for MFIs | Automation eliminates the need for every man power. |
| Automated and advanced credit check | Integration with the government databases and credit bureaus to provide a quick credit assessment |
| Best experience for the customer | Automation and no frequent branch visits for the customers |
| Proper compliance check | Proper following of the rules set by the regulatory authorities |
| High scalability and capacity | Easy to scale the operations when the demand is high |
| Less risk of human mistakes and errors | Automation reduces the risk of human error by a large amount |
| Real-time insights and monitoring | Real-time checking on the dashboard about the client applications and their behaviour. |
Blockqoute
Automation helps MFIs reduce costs, speed up lending, manage risks better, and reach more underserved communities with ease.
Conclusion
Automation is a crucial thing for the Microfinance institutions and helps them to get more customers on board and manage the application efficiently. This helps the microfinance institutions to deliver quick and accurate results and improves their revenue. Having automation in your lending business is not a luxury but a necessity for the credit firms.
Jaguar Software India provides the best microfinance software for the credit firms at reasonable prices. Feel free to get a quote about the services provided to know in detail about the software.
Company Name – Jaguar Software India
Phone No – +919666107000
Address – 18-19, Rajinder Nagar, Police Lines Road, Jalandhar, India
Email – info@jaguarsoftwareindia.com
Website – https://jaguarsoftwareindia.com/
Frequently asked questions
Which company provides the best microfinance software that automates the loan processing?
Jaguar Software India provides the best microfinance software for loan processing.
Can I get the customized microfinance software for my small business?
You can get customized microfinance software that is tailored to your specific needs and client preferences.
What will be the price of the microfinance software?
Price will vary according to several factors. You can easily talk to our experts and get the right guidance about the prices of the software.
How fast does the loan disbursal become after adopting the microfinance software?
Loan disbursal can be done in minutes or maximum hours. It can provide you with approval and disbursal in very little time as compared to manual processes.
Does it automate the document verification and credit check?
It automates and speeds up all the steps involved in the loan lifecycle. It provides automated credit checks, document verification, KYC, and many other steps.
