How Technology is Allowing Us to Scale
Grameen America is the fastest-growing microfinance organization in the United States. To keep up with our rapid growth and provide the best services to our members, last year we completed a multi-year project migrating to a cloud-based management information system. The new system allows us to be nearly cashless and paperless, digitize our data collection, and seamlessly interface with other systems and software. These technological advancements enable us to operate more efficiently and grow at unprecedented rates. Importantly, this new system helps us further empower low-income women entrepreneurs, helping bridge the gap in women’s financial inclusion and transforming the ways in which they do business.
Grameen America recently documented our use of technology in community development, focusing on how innovations enabled us to scale lending and services. The Pivotal Role of Technology in Scaling aims to share our findings, best practices, and lessons learned with the broader microfinance and community development field.
The Benefits of Going Digital
In the past, our members would pay back their loans in cash at their weekly center meetings. Our loan officers, called Center Managers, would spend up to 45 minutes of the hour-long meetings collecting, counting, and documenting these payments. It became increasingly obvious that moving to a cashless and paperless system would be highly beneficial and allow us to grow, become more efficient, and would be better for our members as well—carrying around large amounts of cash was not safe for them (or our Center Managers). Moreover, by moving to mobile technology, we would be helping our members transition to digital banking and the increasingly cashless U.S. economy, helping to ensure their competitiveness and future success.
We piloted a cloud-based loan repayment software called Mambu at our Puerto Rico branch, and then at our Sunset Park branch in Brooklyn, New York. Testing out the system in two locations ensured that the new software would be accepted by the Center Managers and members and helped us build evidence of how it would improve the efficiency and accuracy of our operations. Mambu worked well with another program called PayNearMe, which allowed each member to repay the weekly portion of their loan at a nearby CVS or 7-11 store prior to the center meetings.
The benefits were soon evident. Within one month, the time required to handle transactions and take attendance at the center meetings was cut down by an average of 50 percent.
The Manager of our Sunset Park Branch said that moving over to the new system was not easy for her staff, but, “Now they love it. If you’d ask them ‘Do you want to go back to the old system?’ they’d say ‘Never!’”
Scaling the Solution and its Impact
After adjusting and customizing the system to fit our needs—and after getting buy-in from the branch staff and the organization’s senior leadership—we began to transition all branches to the new system. Making the change had numerous positive effects: improved loan processing, enhanced auditing capacity, and overall improved experience for our members.
The new software has also improved the integrity of the data we collect and allowed us to better analyze how specific branches are performing. Additionally, it has enabled us to be more responsive during crisis situations. After the devastating Hurricane Maria hit Puerto Rico in 2017, we were able to process emergency loans more quickly and pause repayments so that members did not become delinquent.
With this new technology, our field staff now has more time to serve more members and to deliver financial education and training to our members during their weekly meetings, rather than using that time just to collect loans. We are exploring new ways we can offer financial and business training and additional support to our members during these valuable meetings.
The success of our transition to a new banking platform illustrates the power technology can have on increasing the accuracy, efficiency, and safety of an organization’s operations. We hope the lessons learned in this paper will be useful to other organizations embarking on this same journey.