By Harshal Kallyanpur, InformationWeek , February 09, 2010
Being a microfinance company, Equitas handles customers that belong to the lower income group. The company, which was established in December 2007 currently offers microfinance to people from the urban and semi-urban areas of Maharashtra, Tamil Nadu and Andhra Pradesh.
As with any financial services company, a large volume of paperwork was generated daily at Equitas. The greatest challenge faced by the company was verifying the accuracy of the data given the manual document creation and processing mechanisms. Manual checking of application forms also meant lower employee productivity levels. This led to delays in responding to customer requirements, and had a negative effect on the overall customer experience.
“Our business had started scaling up only within a few months of setting up. The challenge for the IT department was to adopt a solution that could match up to the growing scale of the business without any additional costs,” says H Mahalingam, CTO, Equitas Micro Finance India.
Faster Loan Processing
To overcome the above challenge, the organization adopted a DMS from Newgen Software, comprising a document management software and optical mark recognition scanners. Mahalingam explains that scaling up the operations without additional costs meant increasing the throughput without increasing the number of seats in back office operations. Implementing the DMS has allowed Equitas to exactly do so. Prior to the implementation, every loan document-processing operator processed up to 80 documents in a single shift per day.
After implementing the solution, the company has achieved a three-fold increase in productivity. The same operator processes up to 250 documents per day in a single shift. As a requirement, while only around 75 percent of the data is captured through the DMS, the organization has been able to achieve almost 100 percent data accuracy for its loan documents.
Equitas also achieved a reduction in cost and space requirements. The organization had to store documents of each customer for auditing and other compliance requirements of banks and external auditors. Storing physical documents of 1 million customers would required a massive increase in space requirements. Having the documents in digital form has allowed the company to save storage space costs of up to a few lakh rupees per quarter.
The digitized documents have made the auditing process easier. The traditional approach would have made the job of manually processing each document a difficult and time consuming task for the auditors. With the information now available in digital format, an auditor can access these documents from any location via a secure log in and need not be physically present at each office location.
Equitas started with the Proof of Concept (POC) in August 2008 and completed the POC process by October 2008. It went live with the implementation in November 2008. Taking into account the cost of the solution, the scanners and the deployment itself, the company looked at achieving an ROI within 12 months. Mahalingam says that the organization achieved an ROI in just eight months.
Faster loan processing has had a positive impact on customer acquisition and the customer base. The company which had approximately 1.5 lakh customers when it went live with the implementation, had acquired nearly 1 million customers within the next 11 months.
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Newgen Software Technologies Limited is the market leader in Business Process Management (BPM) and Enterprise Content Management (ECM), with a global footprint of about 800 installations in over 40 countries in BFSI, BPO and Fortune Global 500 companies.