3 Dec

Webinar on Good Practice in rural microfinance: OBS tablet technology as a tool for improving service to small rural farmers in Serbia

Event Webinar

Share

Rural areas are estimated to generate 48% of the EU’s gross value added and provide 56% of the EU Member States' total employment. A typical characteristic of the rural economy is the presence of small and medium-sized enterprises (SMEs), many of which are micro-businesses with a high proportion of self-employment. Nonetheless, due to a variety of challenges in Europe only 24% of MFIs serve rural populations (EMN Overview Survey of the Microfinance Sector 2012-2013).

Within the framework of an EU project on microfinance and rural entrepreneurship, EMN carried out the publication European Good Practices in rural microfinance (2015). The publication presents a compilation of 15 ‘good practices’ in the provision of rural microfinance across both Western and Eastern Europe and identifies some lessons learned that can be valuable for MFIs operating in rural areas. EMN invited Opportunity Bank Serbia (OBS), one of the MFIs included in the publication, to share its experience on the use of tablet technology as a tool for improving service to small rural farmers.

Objective

To present the OBS good practice, highlighting how the adoption of tablet technology could help MFIs overcome some of the rural challenges, thus enhancing the financial inclusion of rural clients. Particular interest will be given to the potential adoption of this innovation by other MFIs in Europe.

Outputs

  • Good Practices in rural microfinance (EMN presentation) download below video

  • OBS tablet technology as tool for improving service to small rural farmers (OBS presentation) download below video

  • Did you miss the webinar session? Watch the recording below

Good Practices in rural microfinance:

OBS tablet technology as a tool for improving service to small rural farmers

EMN webinar

December 3rd 2015

Click on this icon to “raise hand” and

request the right to speak. You will be

unmuted and everybody will be able

to listen to your question(s) or

comment(s).

Do you have any question?

You can leave your

comments or questions

in this chat box. They will

be visible to presenters

and organizers only.

Webinar contents

• EMN publication (2015) European Good Practices in

Rural Microfinance

 Nicola Benaglio | Policy and Research Officer | EMN n.benaglio@european-microfinance.org

• OBS tablet technology good practice presentation:

 Mirjana Panin | Director of SPM, Marketing & Communications |

Opportunity Bank Serbia | MPanin@obs.rs

 Novak Rakocevic | Business Development Director | Opportunity

Bank Serbia | nrakocevic@obs.rs

• Q&A session

Good Practices in rural microfinance Albania

Bosnia and

Herzegovina

Bulgaria

France

Germany

Hungary

Italy

Macedonia

Portugal

Serbia

Lessons Learned

• Value chain approach facilitates the adoption of

innovations by clients and increases the profitability of

rural businesses.

• Development of partnerships and alliances with

existing institutions and infrastructure may facilitate

increased outreach and the provision of diverse

services.

• Development of flexible products and services

tailored to the needs of rural farmers/entrepreneurs is

crucial for rural outreach.

• Adoption of technology reduces transaction costs for

both lenders and borrowers and creates the potential for

sustainable rural finance.

O B S t a b l e t t e c h n o l o g y a s t o o l f o r i m p r o v i n g

s e r v i c e t o s m a l l r u r a l f a r m e r s

i n S e r b i a

Oppor tun i t y Bank Se rb i a (OBS) i s a Commun i t y

Bank spec ia l i zed i n m i c ro f i nance , p rov i d i ng m i c ro ,

r u ra l , ag ro and SME l oans as we l l as o the r f i nanc ia l

se rv i ces t o Se rb i an c l i en t s t ha t canno t o rd i na r i l y

access f i nanc ia l se rv i ces f r om t r ad i t i ona l banks .

2

As of October 2015, OBS had: • 23 branches/credit offices across Serbia • About 270 staff of which 111 were loan officers • Average loan of EUR 2,100 • 31,500 active loan clients and portfolio of EUR 71M • 60% of rural clients among active loan clients

H E A D L I N E

Body copy goes here.

This type of layout is great when you have a

combination of words and pictures.

Rural areas in Serbia:

• 85% of its territory

• 55% of its population

• 41% of the GNP

• pronounced poverty

• limitations to development

Loan Officer (LO) efficiency hindered due to long

travel to individual clients and limited number of

loan applications processed in a day (LO comes

back from the field and then enters client data

into MIS, must visit client at least one more time)

O U T R E A C H TO R U R A L C L I E N T S

4

Loan decision during client visit - Sales Pitch

Approval in less than one hour - Customer Service

Reduced acquisition cost - Efficiency

Tracking movement of LOs - HR tool

Initial idea to introduce tablet has been developed in Q4 2013 with following goals:

P R E C O N D I T I O N S

1. High-quality agro loan

methodology

2. 3 years of client

behavioral data for

designing a reliable

scoring model

3. Reliable and

comprehensive Credit

Bureau reports

4. Solid mobile

telecommunications

enabling access to MIS

from the field

5. Scalable and robust MIS

I N T R O D U C T I O N

O F TA B L E T

In September 2014, OBS

has introduced tablets as

a toll for processing all

agro loans up to EUR

3,000. Tablets have been

fully introduced after

extensive development

by OBS IT Department

and a pilot phase, which

enabled OBS to work on

shortcomings identified

by first tablet users.

O B S TA B L E T T E C H N O L O G Y

How does it work?

7

DATA INPUT

• LO inputs data into tablet scoring table

• Credit Score is generated

CREDIT BUREAU (CB)

• Client signs consent for CB Report

• LO emails client’s ID to CB and receives report

LOAN APPROVAL

• Within 20 – 45 minutes since start of visit

• Entire process begins and ends in one client visit

P R O J E C T

R E A L I Z AT I O N

• 30 tablets distributed

to OBS network

• 36 loan officers

trained to use tablet

• 60% of all loans up to

EUR 3,000

processed w/tablet

There are loan officers

who process over 50

loans w/tablet in a month

M A I N O U T C O M E S O F TA B L E T P R O J E C T

9

Since beginning of project, 4,208 loans have been processed in the amount of EUR 5.5 M

0%

10%

20%

30%

40%

50%

0%

10%

20%

30%

40%

50%

Iznos BrojNumbe r

Jan Feb Oct Sep Aug Jul Jun May Apr Mar Dec Nov Oct

Amount

Excellent PAR30 of 0.5%

Share of tablet loans in the portfolio of

agro loans up to EUR 3,000

O B S TA B L E T T E C H N O L O G Y

Direct benefits

10

Client Service

• Loan decision made during just one visit to client instead of several visits which was the case before

• Loan decision made within 45 minutes instead of 3 days before

Efficiency

• Productivity increase from 12 to 16 - 20 loans per month per Loan Officer

• Loan processing time cut from one day to 2 hours

• Data from tablet automatically transferred to MIS

Sales

• Tracking Credit Bureau Reports

• Tracking acquisition time and acquisition patterns of LOs

• Loan disbursement increase potential - 50%

• COMPETITIVE ADVANTAGE

Risk

• Data manipulation disabled

• Tighter risk appetite control

• Loan decisions in Core Banking System

• LO is data collector, not decision-maker

• Risk controls through scoring

M A I N C H A L L E N G E S

1. BUY-IN BY LOAN OFFICERS

This has so far been the main challenge as LOs

realize that with the increased capacity to

process loans, the number of the loans they

process in a month and the number of clients in

their portfolio will increase, as will their targets

2. TIME TO GENERATE CB REPORT

Occasionally, LOs report that it takes a long time

to generate Credit Bureau report when

processing a loan through tablet

3. LIMIT OF EUR 3,000 which actually refers to

outstanding sum per client is an obstacle for

expanding the number of tablet-processed loans

L E S S O N S L E A R N E D

• Training of staff is of

utmost importance

when introducing new

tools and changing the

ways they work

• Staff buy-in is a must,

as staff members need

to be motivated to

embrace the change

• Monitoring of project

since day one provides

valuable insights

C A N I T B E U S E D

E L S E W E H E R E ?

In the European

context, this model can

easily be used without

major problems due to

the quality of mobile

communications, on

the condition that

enough attention is

paid to the scoring

model development.

QUESTIONS?

14

THANK YOU!

Post date

19 December 2017

Browse & learn more about

Webinars

One of the many functions of the European Microfinance Network (EMN) is to organise debates and webinars addressing a wide range of subjects pertinent to microfinance in Europe. These activities are a chance to foster an exchange of ideas among different partners, and contribute to spreading knowledge of microfinance throughout Europe.
Or discover what else we do

See also