Design and Implementation of Account Holder’s Information System for a Micro Finance Bank

Design and Implementation of Account Holder’s Information System for a Micro Finance Bank

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Chapter one on Design and Implementation of Account Holder’s Information System for a Micro Finance Bank

INTRODUCTION

ICT can be a strategic tool in making Microfinance Institutions (MFIs) more efficient and effective. MFIs can reach more people in a more economic way by implementing the right Management Information System (MIS). While a few MFIs are making good use of technology, the majority are facing difficulties in getting the right solution. Microfinance is considered to be an effective tool in alleviating poverty by increasing income of poor households and reducing their vulnerabilities. Today, when the majority of the world’s population is living below subsistence level, more than 3,000 organizations are providing microfinance services to millions of the world’s poor. Yet most of the poor still have little or no access to financial services. Microfinance institutions (MFIs) have reached a mere 70 million out of 2 billion poor people. The task of reaching such a big number is a major challenge.

With a population of around 150 million people, Nigeria has big potential for microfinance. 70% of the population lives in rural areas. Despite achieving a growth rate of 6-7% in recent years, poverty has increased by 2%, showing low penetration of economic benefit to the lower income sector. Unemployment rate stands over 8% and per capita income is US$652. The financial sector of the country comprises some 35 scheduled banks. These banks have an outstanding portfolio of US$20.7 billion against 3.2 million accounts and they hold deposits worth US$33.3 billion in 28.5 million deposit accounts. More than 50% of the deposits and portfolio are concentrated in three main banks with large branch networks. Banks are financial institutions set up to provide customers with some specific functions such as receiving deposits from customers for savings and onward money transfer as well as credit services. Banks as defined by Business dictionary.com is

An establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers. More so, banks are into safekeeping transaction and group management purposes with the intention of making profits and delivering best but affordable services to their customers. These customers may either be individuals or institutional and serving them in the more convenient, efficient and fastest possible way is the aim of all banks so as to derive utmost benefit from them. In the 1990’s through to early 2000’s, the number of accounts holders in the various banks in Nigeria both rural and commercial banks were very few. The use of manual banking system made it uneasy to serve customers in a more diverse ways as urgent demand for information coupled with reconciliation of financial statements of the various institutional customers were very hard to come by. But with the introduction of Computerized Accounting System, the more tedious banking functions through the use of manual banking system has considerably been softened.

In Nigeria, the use of computerized Accounting System in the various banks is drastically changing the way banking activities are being organised. Electronic commerce is now regarded as the panacea for the new commercial revolution that is taken place in the advance world which in one way or the other lacking in Nigeria, and by offering reasonable banking products and services to customers, Nigerian banks had to adopt computerized Accounting System. Moreover, considering the recent improvement in the country’s infrastructure then one can say that the banks had nothing to say but toforcibly adopt this technology in order for them to improve their services for their customers.

BACKGROUND OF THE RESEARCH

Amanano Rural Bank Ltd was registered as a Limited Liability Company on the 29th March 2004 and it is Head quartered at Lagos off Kumasi Road. The Bank is currently operating other Agencies or Branches namely Ikeja Agency, Ojudu Agency and VIP all in Lagos. Services that are currently being rendered by Amanano Rural Bank Ltd to its clients includes Report Activities, Loans, Overdraft, Micro-Finance, Business Advisory, Money Transfers and Investment Services. A very detailed coverage of the case company will be given in my next report.

Vision Company: Amanano Rural Bank’s vision is to become the eye opener and a pacesetter of Rural Banking in Nigeria with Strong growth indicators for regulators and competitors to use as a benchmark and for employees to feel proud working with us.

Company Mission: Amanano Rural Bank’s mission is to generate superior returns to all stakeholders: that is to improve Shareholder value, employee motivation and customer care.

Company Values: The bank’s core values are integrity, professionalism, growth mindedness and continuous improvement.

STATEMENT OF RESEARCH PROBLEM

Complaints over the processes in which Nigerian banks offer their services specifically in withdrawal and deposit services, processing customer information and giving them feedback called for this research. The computerization of the bank’s operations and services as well as the introduction of accounting software and Automated Teller machines by some multi-national banks has helped in improving the financial strength of Nigerian banks. Various studies conducted by most scholars established that Information technology has considerable positive effects on banks productivity, cashier’s duties, banking transaction, bank patronage, bank services delivery and customers’ services. They concluded that, these have positive effects on the growth of banking industry. The main research problem is that, banks in Nigeria seem to be performing below expectation and this has affected customer’s participation of which some of them have been left with no other option than to be selective and extra vigilant in their dealings with the banks.

 OBJECTIVES OF THE STUDY

The main objective of this research work, after a critique analysis of the bank issues and loop hold, which brought about this research work, the research seeks to computerized the existing bank account holders information system, to enhance the bank operate with effectiveness and efficiently to the standard of others advance bank within the state or the country. A system that will efficiently present each account holder their basic information to the account and operation carried out.

RESEARCH QUESTION

These research questions are of interest to the researcher and the stakeholder company in the sense that, the existence of any banking firm to a very large extent hangs on the banks ability to entice and maintain customers through the offer of innovative and technologically improved banking services and products. In order to analyse and interpret these main problems, the following research questions of the study were identified.

1. What are the benefits of a computerized banking system at Amanano Rural Bank Limited?

After completing the researchwork there should be a clear answer to the following questions as well.

• What are the factors behind the growth in the use of computers?

• What are the different software products and their applications?

• What are the benefits of the computerized system in comparison with the manual system?

• What are the cost effects of operating a computerized accounting system?

SIGNIFICANCE OF THE STUDY

This research work significance is that it will promote and increase service delivery of the bank, there by satisfying the clients wants. It will go a long way to manage the bank data concerning the customers/clients.

SCOPE OF THE STUDY

This research work scope is basically on Amanano Rural Bank Limited, Lagos State and the system functionality coverage falls on the account holder information system, basic information and the activities carried out by the account holder.

LIMITATION OF THE STUDY

During the course of performing/researching this project work, the researcher encountered a lot of challenges as well as opposition which ranges from financial constraints, time factor. This factors in their own ways, slowed down the speedy progress of this work that resulted to the researcher not being able to finish the research work on time as is required Also,  within the area of study the researcher was faced with some other forms of constrains that contributed to the limitation of this researcher work, like accessibility to data, information and facts concerning the present study due to some reasons or the other, some not willing to give out information that it is to be within the workers.

DEFINITION OF TERMS

Information System: A computer Information System (IS) is a system composed of people and computers that processes or interprets information. The term is also sometimes used in more restricted senses to refer to only the software used to run a computerized database or to refer to only a computer system

Bank: A bank is a financial intermediary that creates credit by lending money to a borrower, thereby creating a corresponding deposit on the bank’s balance sheet.

Account: A record of financial transactions for an asset or individual, such as at a bank, brokerage, credit card company, or retail store1

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