Revolutionising microfinance

For the past 25 years, Esperanza’s mission has been to free families from poverty and share its religious message. Their comprehensive approach includes providing communities with access to capital, preventative healthcare, education, and financial services. A large part of their work is providing micro and small business loans to entrepreneurs and families outside of the formal financial sector. They see potential in their borrowers, and work with those who are under-served, unbanked, and ready to be equipped with tools to move them toward hope-filled futures.

The challenge

Fulfilling its mission was difficult with a legacy loan management system that was only accessible on site and managed by a single person. The system didn’t allow mobile uploads, so loan applications were completed on paper in the field and entered manually back in the office. This made it slow and costly to review and approve applications. Similarly, data needed to be downloaded by the system developer for reporting, so reports were often outdated and difficult to use. As the organisation grew, it needed a way to track loans that were in default, and to track the non-financial services that they offered. The existing system couldn’t handle these activities, so Esperanza adopted separate solutions that didn’t connect with each other. This made it difficult to understand who the organisation was serving and how to improve their offerings.

The solution

Leveraging Amazon Web Services (AWS), Mambu’s SaaS, cloud-native, API-driven banking platform provided Esperanza with the flexibility to select only the lending engine, rather than a costly big-box solution that would end up underutilised. Mambu’s feature-rich, flexible lending engine helped Esperanza configure new products for their customers using low-code or no-code APIs to develop and test features securely and efficiently, at scale.

Mambu’s cloud-based engine, powered by a variety of AWS services, provided Esperanza with lending, payment, account, and transaction solutions in a versatile, agile way.

The results

• Esperanza migrated to the SaaS solution within six months, a process that can typically take years.
• Reduced loan disbursal preparation time from two hours to two minutes and reduced loan processing and approval time to six days
• Increased loan distribution to 12,000 loans/year following implementation
• Increased access to data across loan applications and related documents and enhanced financial tracking and transparency, which led to better identification and reduced fraud.
• Better reporting provided increased visibility into time spent on loan processing activities, enabling Esperanza to identify areas to further improve processes and maximise efficiency.