What Is the Mifos Initiative?

The Mifos Initiative Fact Sheet

What is the Mifos Initiative? Grameen Foundation’s Technology Center founded the Mifos Initiative to address the microfinance industry’s information management challenge. Using the pioneering open source framework, the Mifos Initiative will build a software platform and a global community of technology and microfinance specialists who will maintain, enhance and grow the software.

Why was the Mifos Initiative launched? The Mifos Initiative meets the overwhelming demand in the market for technology that MFIs can manage as their needs evolve. Mifos provides a common industry platform that allows for the sharing of innovation. Using the open source framework, a new service paradigm puts ownership of the technology in the hands of the industry.

In the current microfinance landscape, a recent study found that despite a number of off- the-shelf MIS (Management Information System) products available, 46% of MFIs around the world are still using excel or manual systems to manage their portfolio and client information, severely hindering their efficiency and capacity to scale into the hundreds of thousands. An additional 44% of MFIs have an MIS that is custom built or developed in- house. The off-the-shelf packages only capture 10% of the market (CGAP, 2004). This needless and expensive duplication of effort is severely hindering the growth and scale of the microfinance industry and is indicative of a major gap in the service model.

What is value proposition to the microfinance industry? The Mifos Initiative offers more than a management information system. It is a new approach to technology - a common platform, uniting the microfinance industry around technology and giving MFIs the flexibility and ownership of technology they demand. Free and open access to the Mifos software source code, takes the industry away from a 1:1 MFI and vendor relationship, allowing multiple parties to access and modify the software. With Mifos, the microfinance industry not only benefits from the technology, it contributes to it, improves it and owns it.

What is the Mifos software platform? The Mifos platform is at its core, a management information system that provides the key functionality required by MFIs including: client management; loan and savings portfolio management; tracking of all loan repayment, fee and savings transactions and reports. The Mifos core software is characterized by its ease of use, which is made possible through its web interface and sophisticated permissions parameters that will greatly improve data management and security.

The Mifos software was designed to ensure flexibility, scalability, and extensibility. It is written in Java (JDK 1.5) and uses industry-standard 3rd party components (MySQL, and JBoss). See http://wiki.java.net/bin/view/Javatools/TechnicalOrientation for more information on the technical components.

What is the Mifos ecosystem? The Mifos ecosystem is a supportive collaboration of microfinance practitioners and IT professionals who contribute to the ongoing growth of the Mifos software, sharing learnings and innovation. The MFI contributes by providing local, in-field feedback based on their needs and experiences with the product. The Mifos Specialist, as a local organization, provides fast and knowledgeable technical support and consultation to their partner MFIs as they customize and implement Mifos. They will develop local in-field knowledge to feed back into the ecosystem, ultimately producing a very robust software product. Committed technical volunteers contribute to the project’s open source development, as well as provide technical support to the community to adapt, implement, and localize Mifos.

While Grameen Foundation is acting as the project incubator, we are committed to building a consortium of microfinance industry leaders over the next two years, who will jointly provide governance and direction for the Mifos ecosystem. This industry-wide effort will be the driving force of the Mifos Initiative, ensuring its long-term sustainability.

What has the Mifos Initiative accomplished to date? The Mifos initiative has reached some critical milestones. In August 2006, Mifos began field testing at Grameen Koota’s BSK branch in Bangalore. This means that branch staff are entering client and portfolio data, giving the developer community its first set of in-field production feedback. While field-testing at Grameen Koota, we have also started working with our second beta partner, ENDA, in Tunisia. Implementation planning is underway with an eye towards live production at ENDA branches in early 2007.

The project has made great strides towards a distributed, open source development model. The source code for the Mifos software is freely available and we are fostering a rapidly growing Mifos community of volunteer developers and regional IT consultants. Technical experts can find the tools they need to install Mifos, review, and contribute to its development on the project page at java.net. See (http://wiki.java.net/bin/view/Javatools/MIFOS).

To supplement the beta testing at Grameen Koota and ENDA, we are currently looking to partner with select MFIs to implement Mifos. The selected MFIs will play a pioneering role in establishing the global Mifos community and enhancing the Mifos platform. We will select a cross-section of MFIs that allow us to test different aspects of the product in different environments. We plan on selecting the initial partners by the end of 2006. Grameen Foundation: Grameen Foundation is a global non-profit organization that combines microfinance, new technologies, and innovation to empower the world's poorest people to escape poverty. Founded in 1997, Grameen Foundation’s global network includes 52 microfinance partners in 22 countries. The network has impacted an estimated 5.5 million lives in Asia, Africa, the Americas, and the Middle East. For more information on Grameen Foundation USA, please visit www.gfusa.org.

To join the distribution list for the regular Mifos Bulletin, please email [email protected]. Also, view the Mifos pages on Grameen Foundation’s website for the latest project news (http://www.grameenfoundation.org/mifos/).