Nelito implements an Integrated Lending Management Solution at LxLB
February 20, 2023
Overview
Laxmi Laghubitta Bittiya Sanstha Limited (LxLB), a microfinance subsidiary of Laxmi Bank Limited (a commercial bank of Nepal), is a national level microfinance institution licensed by Nepal Rastra Bank, the central bank of Nepal. It is the first microfinance institution to be registered as a subsidiary of a commercial bank in Nepal. Registered as a limited company on 30th November 2010, LxLB received an operating license from the central bank as a “D” class financial institution in 2012 to operate under the Bank and Financial Institution Act 2003. It also commenced formal microfinance operations in 2012.
Nelito Systems is a group company of DTS Corporation Japan. The company provides software solutions and services for banking, financial services, and government sectors globally. Formed in the year 1995, it has more than 430 customers in 20 countries across 4 continents. Nelito’s business offerings are provided under the FinCraft Suite and cover areas such as transaction management services, reporting solutions, data management & data quality services, payment systems, and mobility solutions.
The challenges faced by the bank were:
- The staff onboarding process including KYC form filling, biometric authentication, etc. was done manually, the process used to take more time to completion.
- For security concerns, managers wanted to prevent unauthorized use of the system, corruption of data, restricted access to the database, etc.
- Agents and managers used to struggle to get information related to customer onboarding, loan request, transactions, etc. as the systems were not compatible with both offline and online modes.
- The existing solution was not scalable, and the MFI was looking for a centralized and scalable solution which would help to increase the presence of MFI in Nepal.
The program complexities included:
- The first-time incorporation of the Nepali calendar in the ILMS application instead of English calendar. All functionalities like interest calculation, monthly, quarterly, yearly end processes were built as per the Nepali calendar.
- The legacy database migration of a large transaction base and database size of approximately 600 GB
- Migration of the entire legacy data since inception without any support from the existing vendor.
- Working on new hardware technology like MS SQL 2017
- Unique Nepali banking process and unique MFI process
- Coordination and connection of FI on mobile as well as in branches
- Conversion of all existing manual reports into system-generated reports
Implementation Process
Nelito followed a project management methodology as defined in its Quality Management System (QMS) which is a compliant to CMMI Level 3 & ISO 9001:2015 guidelines. The methodology is derived from the following principles and is customizable to best suit the client’s objectives:
- Creation of a shared vision & alignment of the project plan/s with the strategic business drivers of the client and all relevant stakeholders
- Creation of delivery models for different types of projects
- Clearly defined project deliverables, relevant stake holder’s dependency, milestones, expectations, and objectives.
- Direct ownership of project elements and deliverables
- Minimization of project risks by up-front joint risk identification, analysis, and contingency planning along with relevant stakeholders
- Focus on an effective and flexible project communication strategy that will facilitate successful & timely coordination and collaboration among the different stakeholders.
- Transparency in communicating the status of the project by way of planned regular status report meetings.
The waterfall model of software development was adopted. The five milestones in the life cycle were the requirement process, design and coding process, testing in the test environment process, User Acceptance Testing (UAT), deployment and go-live process. The tools used were Visual Studio 2012 to create web applications, Microsoft SQL Server 2017 to store application data, SQL Server Reporting Services to create reports for the application, and Microsoft TFS for the configuration of the source code.
Nelito also defined the project governance process – the team consisted of core teams at the customer end and the Nelito team. The team comprised a project director, project manager, tech lead, implementation and support executive along with the developer team. The team was focused on:
- Scope & contract management: It ensured that the contracted services were delivered, along with the responsibility of ensuring the incorporation of all applicable changes into the contract through an effective change management process.
- C-Sat management: A critical task for the governance team is to manage the expectations of the customer at the highest level and also have a clear understanding of what’s happening at the ground level, which would come out through periodic c-sat surveys and customer feedback.
- Issue & escalation management: Appropriate handling of the issues/escalations raised by the customer through a set process of recording the issues, responding, and resolving them promptly.
- Risk management: Skilled members were brought into the project based on decisions of the governance teams, to assess various types of risks and notify the organization proactively.
- Service level management: The manager was responsible for the quality of the services delivered in accordance with the SLAs.
- Strategic value management: Aligning IT and business strategy for the long-term growth of the organization remains the key concern for CEOs and CIOs. The executive governance layer focused on IT strategy and on using IT to increase efficiency.
Benefits Achieved
- The following is the customer impact achieved by LxLB with implementation of Fincraft ILMS:
- With the implementation, the MFI has been able to increase its loan book.
- The loan process has been streamlined and the TAT has been reduced. There has been a cut-down in many of the manual systems.
- With the implementation of the solution, the customer onboarding process is now done digitally, thus saving time and capturing accurate information.
- With the implementation of the solution now the staff onboarding process can be completed online, thus reducing process time.
- Multi-level security controls prevent unauthorized use of the system and corruption of data, restrict access to the database, maintain database process controls, and log all database transactions.
- The solution provides real-time information like customer on-boarding, loan requests, transactions, etc., thus helping the staff to get necessary information easily.
- The tablet application has helped field officers to increase market penetration and higher loan disbursements.
Conclusion
The client requirement was hence met with a 360-degree view of loan applications, helping managers to take better decisions, and automated processes increasing efficiency across the board.
Key Facts
FI: Laxmi Laghubitta Bittiya Sanstha Limited (LxLB)
Headquarters: Nepal
Founded: 2010
Supplier: Nelito Systems
Solution: FinCraft Integrated Lending Management Solution
Timeline: 18 months
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