CASE STUDY

About the ClientNRSP Microfinance Bank is one of the largest Microfinance institutions in Pakistan with a customer base of around 350,000. Formerly a Non-Governmental Organization (NGO), NRSP converted into a Microfinance bank, fully regulated by the State Bank of Pakistan.

The Microfinance industry in Pakistan has undergone a transition in the last three years. Until recently the industry was dominated by non-governmental organizations (NGOs) that were primarily dependent on low cost foreign donor funding to drive their business model. State Bank of Pakistan, the banking regulator, decided to migrate these institutions to a more sustainable footing by introducing Microfinance Banking licenses and asking the NGOs to convert to a corporate structure with the ability to raise a deposit base and get access to lower cost funds to sustain their lending operations.

NRSP, the largest microfinance NGO in Pakistan, was in the process of converting into NRSP Microfinance Bank with minority shareholding from IFC, KfW (the German Development Finance Bank) and the Acumen Fund. As part of this transition, NRSP also needed to upgrade its technology infrastructure that was not adequate for commercial banking operations.

Using a grant from the Gates Foundation, NRSP Microfinance Bank procured Oracle FLEXCUBE as its Core Banking solution and selected Techlogix as its implementation partner. This was the first implementation of a world-class core banking system in the Microfinance industry in Pakistan. Techlogix has migrated NRSP to FLEXCUBE and as of 2012, all NRSP branches are fully operational on FLEXCUBE.

CustomerNRSP Microfinance Bank

IndustryFinancial Services

OfferingOracle FLEXCUBE

Harmonizing People | Process | Technology

Techlogix delivers FLEXCUBE for NRSP Microfinance Bank

The ChallengeNRSP Microfinance bank commenced its operations as a bank in March 2011 and wanted to utilize Oracle FLEXCUBE for:

◉ Initiating branch banking

◉ Transforming the manual disbursement and recovery model to an automated one

◉ Increasing its organizational capacity to adopt change and roll out newer financial products

◉ Supporting its growing branch network

◉ Ensuring a smooth transformation of business processes from an NGO to a fully regulated bank

◉ Meeting the audit and operational requirements of the Central Bank

◉ Reaching out to under-privileged farmers and entre-preneurs in the country

Techlogix planned, designed, configured and tested the following major FLEXCUBE functions for NRSP:

◉ Core banking configuration

◉ Retail/Branch banking

◉ Microfinance operations

◉ CASA (Current, Savings and Term Deposits)

◉ Enterprise Limits & Collateral Management

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The SolutionThe project was initiated with a 6 person Techlogix team and a 15 person NRSP Microfinance Bank team working together to achieve the following:

◉ Identification of gaps in products and processes

◉ Design and Parameterization of the bank’s products

◉ Data Migration Strategy and Conversion of branches

◉ Consolidation of the bank’s general ledgers and products

◉ Consolidation of the bank’s general ledgers and products

◉ Identification, analysis and development of regulatory and operational reports

◉ Identification, analysis and development of regulatory and operational reports

◉ Testing Strategies, test cases and reconciliation tools aimed at user acceptance testing, system integration testing and business simulations

◉ Training for the bank’s core team and end users

Key Contributions: Assisting in organizational readiness

The project was kicked off with some major risks already in place:

◉ The need of mapping the As-Is NGO business processes to a core banking solution

◉ Several new processes needed to be designed from scratch to meet the requirements of new services that NRSP planned to offer

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◉ Lack of familiarity of the end user base with certain aspects of a comprehensive Core Banking system

Additional challenges were faced during the implementation related to human resources, infrastruc-ture and logistics. Since the bank’s head office is based in a relatively small city of the country, the foremost challenge was to train the resources. In order to overcome this challenge, an extensive technical and functional training session was designed to train the users. Around 10 weeks of product walkthroughs, classroom and hands-on training sessions were held for the users to train them so they could efficiently and effectively use the system.

In defining the numerous processes that were required to address NRSP’s plans to offer new services, discussions were held with the users and management of the bank to identify and understand their requirements. Techlogix worked closely with the Bank in developing a detailed Process Manual to control the new operations within the Bank and helped align these new processes closely with the use of the FLEXCUBE.

Finally, financial product requirements were transformed into system products defined within FLEXCUBE. The full range of microfinance products offered by NRSP were designed and configured in the system. Additionally, NRSP was able to define a full range of liability products that matched the offerings of regular commercial banks and was thus able to launch its branch banking operations in a fully competitive manner.

Key Contributions: Focused Project Governance

Additional steps taken to ensure success:

◉ Strict project management aiming at rolling out the pilot branches within a year

◉ Strong project governance committees and processes in place

◉ Well defined ownership within the Bank and Techlogix

Key Contributions: No compromise on Quality

Techlogix supported around four months of User Acceptance Testing, utilizing four thousand test scenarios to cover all the modules and all possible functional and technical scenarios. The use of issue tracking software,weekly status meetings with the client team and an onsite presence of Techlogix resources during UAT, sanity testing, migration and Go-Live phases were successful contributors to an effective quality system.

BenefitsThe benefits that have accrued to NRSP Microfinance Bank include:

◉ Transitioning from a manual system of record keeping to a fully automated solution

◉ Support a full range of liability products which were new to NRSP operations

◉ Becoming the first Microfinance bank in Pakistan with an international core banking system designed specifically for the Microfinance sector

◉ Flexibility to introduce new asset products quickly to meet the evolving needs of the microfinance market-place

◉ A state-of-the-art infrastructure and technology to meet future challenges without any major restructur-ing of systems

◉ Increased efficiency and productivity of users to handle anticipated increases in customer volumes

About Techlogix

Techlogix is an IT Services, Consulting and Business Solutions company that helps its global clientele achieve enterprise transformation by harmonizing people, process, and technology. Techlogix builds high performance solutions using practice-specific delivery methodologies that utilize its globally distributed development teams. Our people combine the spirit of engineering excellence with a strong commitment to end-to-end customer experience. Techlogix employs approximately 300 people in 5 delivery centers worldwide.

Visit us online at www.techlogix.com

ContactFor more information, contact info@techlogix.com

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Financial Serviceswww.techlogix.com/financialServices

Techlogix implements a full range of solutions for the Financial Services industry focusing on Commercial, Islamic and Microfinance Banks. Our implementation portfo-lio includes FLEXCUBE Core Banking, Risk Management solutions, Compliance and Anti-Money Laundering and Reporting and Data Warehousing. We also provide Application Management Services for these solutions with both onsite and offsite models. We also implement BPM and workflow solutions which automate and improve operational processes within Banks.