How Geo-Location and Movement Tracking Helps in Early Fraud Detection1. Real-Time Movement & Activity MonitoringArukus’s Field Track-O Application continuously tracks the movement of field agents. The system cross-verifies scheduled tasks with actual travel patterns, ensuring that field executives are visiting designated locations.Example: If an agent is assigned to collect repayment from a borrower at Location… Continue reading Tracking Fraud Before It Happens: Geo-Location & Movement Monitoring in MFIs & NBFCs
In the world of microfinance institutions (MFIs) and non-banking financial companies (NBFCs), the battle against payment collection fraud has been an ongoing challenge. Instances of malpractice, such as loan officers failing to deposit payments or misappropriating funds, not only result in financial losses but also tarnish the reputation of these institutions. However, with the advent… Continue reading Collection Fraud Detection using Smart Technology for MFIs and NBFCs
In today’s rapidly evolving business landscape, the need for agility and adaptability is more critical than ever. Organizations face constant pressure to stay ahead of the curve, navigate regulatory complexities, and respond swiftly to changes in their operating environments. In this context, internal audit and compliance functions play a pivotal role in ensuring adherence to… Continue reading Leveraging Internal Audit & Compliance Tools for Enhanced Collaboration and Agile Reporting
The shocking incident involving a 27-year-old representative of a finance company in Tamil Nadu allegedly kidnapping an 11-year-old girl over her father’s unpaid loan installments serves as a stark reminder of the critical importance of reputation risk management for Microfinance Institutions (MFIs) (News Source: India Today).This incident prompts a nuanced examination: Was the pursuit of… Continue reading Was collecting that one bad loan worth it? A closer look at Reputation Risk Management for MFIs
Introduction Microfinance Institutions (MFIs) play a crucial role in providing financial services to the underserved population, empowering them to build sustainable livelihoods. However, the nature of microfinance operations exposes these institutions to various operational risks, particularly in the management of loan portfolios. Transaction risk, a common challenge in MFIs, requires effective strategies and tools for… Continue reading Managing Transactional Risks in Microfinance Institutions
In 1996, Finansol, a regulated microfinancial intermediary in Colombia and an affiliate of ACCION International, underwent a crisis that resulted in a significant deterioration of its portfolio quality. ACCION’s intervention was crucial for two reasons: the well-being of 40,000 microentrepreneurs and their families relying on Finansol’s financial services, and the representation of a microfinance model… Continue reading Lessons from History: The Corposol-Finansol Institutional Crisis
Introduction:Fraud risk, often referred to as integrity risk, is a significant concern within the microfinance industry. This risk entails the potential loss of earnings or capital due to intentional deception by employees or clients. Microfinance Institutions (MFIs) are particularly susceptible to various forms of fraud, such as direct theft of funds, misleading financial statements, bribes,… Continue reading The Imperative Role of Fraud Management in Microfinance Institutions
Proactive risk management stands as the linchpin of long-term sustainability for microfinance institutions (MFIs), yet many stakeholders remain unaware of the multifaceted components that constitute a comprehensive risk management strategy. It is paramount for the board of directors and managing directors, who wield the most influence in overseeing MFIs, to establish guidelines that infuse the… Continue reading The Crucial Role of Proactive Risk Management in Microfinance Institutions
In the vast landscape of rural India, access to flexible financial products remains crucial for the well-being of the rural masses. Micro-Finance Institutions (MFIs) are striving to bridge this gap by offering innovative market-oriented products that combine the much-needed features of flexibility and discipline. However, striking a balance between these two seemingly opposing traits presents… Continue reading Cross-Selling of FMCG/FMCD Products by Microfinance Companies in Rural India
In the realm of Indian microfinance institutions (MFIs), regulatory issues have emerged as one of the most pressing challenges. While the Reserve Bank of India (RBI) plays a crucial role as the premier regulatory body, its focus has predominantly been on commercial and traditional banks, leaving some of the unique needs and structures of MFIs… Continue reading Addressing Regulatory Challenges for MFIs with Technology
