Table of Contents

INTRODUCTION........................................................................................................................................2
AIM..............................................................................................................................................................2
SIGNIFICANT OF THE STUDY.................................................................................................................2
STATEMENT OF THE PROBLEM..............................................................................................................3
JUSTIFICATION OR SIGNIFICANCE OF THE STUDY............................................................................3
THE IMPORTANCE OF ICT TO OTHER MICROFINANCE INSTITUTION.............................................4
ROLE OF ICT SYSTEM ON MICROFINANCE OPERATIONS..................................................................4
CONCLUSION.............................................................................................................................................5

INTRODUCTION

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Information lies at the very heart of microfinance. Whether by hand or by computer,
microfinance institutions (MFIs) hold and maintain large amounts of important business data,
from basic client information to detailed analyses of portfolio statistics. This data must be
stored, processed, and clearly presented so that MFI Boards and Managers can make sound
decisions. A good information system should do just that: it should act as a conduit through
which raw data become useful and useable information. The role of information and
communication technology is the drive towards developmental in the use of ICT in both formal
and informal microfinance sector. Unlike the banks and small microfinance enterprises, the use
of ICT had been a great strike towards their operations. With the emergence of different
microfinance institutions in the country to alleviate poverty and the empowerment of the youth
and women after the war in Sierra Leone in 2000, yet still the poverty rate is quite striking, the
poverty rate in the country is increasing every day, hunger, diseases, illiteracy, death rate, etc.
BRAC registered as nongovernmental organization with the ministry of finance and economic
development in June 2008 as a microfinance company with the registrar general and the central
bank of Sierra Leone in January 2009. Its country office is located at 23 old Lumley Road off
spur road, Wilberforce, Freetown. BRAC runs successful services in microfinance, health,
agriculture, poultry and livestock and legal empowerment through seven areas offices and
thirty-five (35) branches within the country wide namely: Freetown ten (10), Kono (4), Makeni
(6) Port Loko (5) Kenema (5), Bo (5).

AIM
This project is aim at achieving the role and impact of information and communication
technology in the microfinance sector BRAC organization a case study.

SIGNIFICANT OF THE STUDY

The information and communication technology will enable financial institution managing
microcredits or small-scale microfinance business sector to assess and evaluate potential
developmental projects and gives the insight into a likely problem. It will also assist
management of the microfinance institutions (MFIs) how to in cooperate ICT sector into their
microfinance program or sector. In order to benefit from the microfinance activities, and reduce
lose or failure in bad debts to their operation of the microfinance institutions (MFIs)

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STATEMENT OF THE PROBLEM

The emergence of microfinance institutions has helped to reach out to the unbanked population
in the country especially the poor both in rural and urban areas. The main aim of this institution
is to complement government and other non-governmental organizations effort to help alleviate
the level of extreme poverty among the unbanked poor in the rural communities (Chirwa,
2002). Various microfinance institutions and other stakeholders like government appear to take
the impact of the microfinance interventions for granted. The problem with government
providing microfinance services for the rural poor is that, the rural folks see the funds as free
with no intention to pay back. This has affected other institutions that provide the same
services negatively (Ashun, 2010). This condition is compelling many microfinance institutions
to move away from providing funds to the rural folks to the urban areas because these
institutions must make profit to be in business and for their investors. This situation makes it
difficult for these service providers to meet the rationale behind their establishment. Therefore,
this study will seek the strategies used by government in fighting against poverty in Sierra
Leone.

JUSTIFICATION OR SIGNIFICANCE OF THE STUDY

This proposed research study will be significant because of the following reason: The study
brings to light the extent to which Information and Communication Technology activities of
BRAC microfinance Organization is helping to reach out to the poor loan in rural communities.
The study as well outlines the challenges faced by the institutions providing microfinance
services to the poor communities and see how best they could improve on it to meet the set
target through the use of information and communication technology. The study also will
highlight the contribution made by information and communication technology these institutions
to help government and other development partners’ effort to help lift the rural poor out of
chronic poverty to raise their standard of living beneficiaries. Finally, the study will also unveil
the extent to which information and communication technology will make microfinance
institutions program a success. It would also show if the microfinance institutions have been
able to move themselves from paper work to digital or database through the acquisition of ICT
assets, has no risk of their portfolio, able to make more profit annually and expand their
coverage area or area of operation.

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THE IMPORTANCE OF ICT TO OTHER MICROFINANCE INSTITUTION

The importance of ICT to other microfinance institute such as hope micro, SMT, LAPO, call to
business, and the formal and the non-formal banking sector; Sierra Leone Commercial Bank,
Rokel commercial bank eco-bank, GTB to mentioned few. Have Banks Ignored Humanity’s
“Long Tail”? To commercial banks, the poor are considered hard to serve and represent
financial risk. Rural markets are difficult to reach with financial services because they are in
remote locations, have low population density and the sizes of transactions are relatively small.
As a result, MFIs tend to serve more urban customers than rural customers. Insufficient ICT
capabilities hinder MFIs operational efficiency. Many MFIs develop internal IT capabilities that
prohibit them from taking advantage of developing standards and platforms.

ROLE OF ICT SYSTEM ON MICROFINANCE OPERATIONS

A well-developed ICT system is very important for knowledge share and communications
between the service providers of micro-finance and the entrepreneurs. Social media is a
powerful tool for reaching out to (new) customers. It’s cheap and you can target specific
groups. Targeting specific groups and offering them something useful is more effective than
using social media just for propaganda. Good practices in the use of social media for specific
goals are announcing conferences and workshops, or using it to market new loan products.
Most of the participants use social media to 11 share information with others. Main reason is for
reaching new customers, but also for sharing information with a professional network. To make
maximum use of social media, a strategy has to be developed. The time needed and the regular
updates required are reasons for not using social media. Appointing an IT officer can contribute
to setting up a successful strategy. There are many examples of applications that can be useful
for microfinance customers: mobile banking, GSM banking, on line applications, SMS reminders
for loan repayments, Internet online surveys (e.g. for social performance), business health
checks, customer platforms, e-learning solutions, tool-kits, etc.

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CONCLUSION

The role of information and communication technology on microfinance sector in Sierra Leone
in the BRAC Microfinance organization is very essential in order to make sure the economic and
social benefits of the MFIs investment into Sierra Leone reached and helped local people, the
Government of Sierra Leone approved its first Local Content Policy and to meet the millennium
development goals, in keeping with its ultimate aim of reducing the country’s 70% poverty rate.
Information and Communication Technology system can lower the cost of communication,
transportation and the overall business cost and impact on Microfinance Operations. No matter
the size of the MFIs, they most invest in Information and Communication Technology
equipment’s, and application of Information and Communication Technology systems for
microfinance operations. MFIs can also reduce transaction cost by reducing staff time when
applying Information and Communication Technology based systems.