Grameen Bank: Management Information Systems

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Advancement in information technology has brought changes regarding how organizations are managed. Information technology is used in almost all sectors of the economy. One of the areas that information technology has found wide application is in financial management. Financial institutions usually have a lot of data and information to manage. Therefore, the success of these institutions is highly dependent on how they manage this information. To financial institutions, information technology came as a blessing, helping to manage large amounts of information. Management information systems have been developed to manage and bring efficiency in financial institutions (Robey, Franz, 1995, p. 89). However, the use of information technology in financial institutions comes with various challenges. To improve efficiency in its service, Grameen Bank has undertaken a project to integrate information technology in its operations.


Grameen bank has been successful in micro credit. Started in 1976, the bank has completely revolutionized the banking sector. At its inception, Grameen bank was intended to provide affordable credit facilities to the poor in Bangladesh. The bank’s founder, Nobel Laurent Professor Yunus viewed lack of credit as the main contributor to poverty in his country. Lack of collateral by the poor made them not to qualify for loans; hence, Yunus intended to use mutual trust rather than collaterals for qualification. The frame work of Grameen bank has allowed it to grow beyond the border of Bangladesh (Dowla, 2006, p. 102-109).

Grameen Bank has been using a manual system to manage financial information. This, however, has been challenging especially due to the increased number of customers. The increased number of customers has increased the amount of information to be managed. The growth and expansion of the banks made information management more complex. Grameen bank has also expanded its operations to other countries beyond Bangladesh. This has called for better management practice. The main areas of concern Grameen Bank are reducing operation cost, allowing easy information sharing, and efficient information management.

Information management is critical to a financial institution. One of the management areas that have been a challenge to Grameen Bank has been in financial reporting. Various financial reports including operational reports, financial statement, portfolio reports, summary reports and cash flow are central to success of a microfinance institution. Grameen Banks has been involved in disbursing grants and loans to stimulated economic development (Dowla, 2006, p. 107). The bank has to track, monitor and communicate the performance of the interventions to the necessary authorities. Incorporating management information system is viewed as one the way to improve its operations. Embracing information systems is also part of the strategy for expanding the operations of the bank and facing challenges of globalization.

Management Information System

Advancement in technology has led to various changes regarding how organizations are managed. Computer systems are common features in almost every office. Computer systems are used for various functions in business management (Oz, 2006, p. 32). In the past, computer systems were view as substitute for typewriters. However, advancement in the information system has changed the role of computers. Computer systems are used more in the management of organizations. Management Information Systems (MIS) assist in management by availing the required information.

They are considered to be part of overall internal management procedure that includes people, technology, and documents. Management information system is used in business for solving management problems such and communication, reducing cost and reducing mistakes (Lucey, 2005, p. 47). Management information system is different from other regular information systems. MIS is used to integrate other information systems in an organization to bring about overall efficiency in management.

Management information system is vital for the management of financial institutions. Financial institutions have to manage a lot of financial information about their clients. Management information systems are used in various managerial activities and decision making. Management information system is implemented in a financial institution through a banking information system of a financial information system.

Micro-Finance Management Information System

Need for MIS

Grameen bank has various operations that require a management information system. The mission of the bank is to eliminate poverty through micro finance. The bank organizes its clients in groups; loans and grants are given out through these groups. The members of the groups act as guarantors to any other member of the group. Unlike conventional banks, Grameen Bank does not request for collateral. This framework calls for a lot of monitoring. The bank needs to keep track of each member of the groups. The bank also has to follow up the group to ensure that they use the credit obtained for the intended purpose. Grants and loans are intended for helping people overcome poverty. The bank has to monitor the groups to make sure that the objectives of the loans are achieved. In addition, the bank also accepts deposits and maintains account for its client. The major challenge to Grameen bank is the high number of its clients and the large number of transactions that it supports. In addition, the bank has most of clients in rural places where infrastructure is a challenge. Unlike other financial institutions, the bank cooperates with other bodies in poverty eradication programs. The bank cooperates with governments and non-governmental organizations to distribute funds for poverty eradication.

Most of the Operations at Grameen Bank have been carried out manually. Bank officials mostly use paper and pencil to keep records. Computer systems are rarely used. Common applications such as Excel and Access are used in making summations or keeping records. With growth in the number of clients and transactions, the manual method has become less efficient. The manual method resulted in the maintenance of a large number of records, errors, difficulty in retrieving information, difficulty in keeping track of clients and difficulty in integrating various roles in management.

Risks Associated With Microfinance management system

Although the Management Information System can have a positive impact on Grameen Bank, nonetheless, there are various risks that are involved. Management information system is used to help in management in an organization. The system is used not only to manage information but also in making major management decisions. When the management information system fail to function as intended, it can result to great loss to an organization (Galliers & Sutherland, 2008, p. 103). Grameen Bank has been successful even without a management information system. A management information system should result in streamlining operations and making the bank more successful. Grameen Bank share information with government and non-government organization. Thus, the system should enable better communication and information exchange with other bodies. To minimize risks, there should be care in implementing the system.


Operations at Grameen Bank have been carried out manually. To implement management information system, the bank has to upgrade its infrastructure. A management information system required sufficient computer systems. The bank has to arrange for procurement and installation of the necessary hardware and software. The geographical location of Grameen Bank branches is a challenge to implementation of MIS. Most of the branches are located in rural areas that doest not have some necessary infrastructure such as internet connection. Cost of implementing the Micro-finance management information system is a major challenge to Grameen Bank. The bank has buy enough computer systems, train employee and carry out other necessary activities required for the system.

Software System Choice

The software used in management information system is a major factor to success or failure of a management information system. The software chosen should be able to carry out the roles intended for the management information system. Grameen Bank has two choices for acquiring the management information system. The bank can procure ready made ‘Off the Shelf’ financial management systems or develop its system from scratch. Off the Shelf application have various advantages. By buying an Off the Shelf application, the bank will not be required to go through the technicality of preparing the application (Oz, 2006, p. 73). The applications are also readily available in the market and thus can be obtain within a short time. The cost of Off the Shelf application is relatively cheaper as compared to developing its system. However, Off the Shelf system has various disadvantages. Obtaining a system that best fits the operations of the bank is not easy. The software bought from software vendors may not be able to solve all the information needs of the bank. In addition, the software may have some unnecessary features.

Developing its Microfinance management system is another option that Grameen Bank has. There are various advantages that the bank can accrue from developing its own information system software. By using this method the bank will be able to include all the features that it finds to be necessary. The management information system can be customized to comply with the bank’s uniqueness. The management also has the opportunity to monitor the development and ensure that the final product reflect what was desired. Despite of the advantages, this approach has various challenges. Developing its own software will cost more than buying ready-made application. A part from cost, developing software takes time and the bank has to wait for a longer time before acquiring the management information system. Developing software requires skills and expertise. The bank may not be having the necessary expertise to facilitate the process. In-house developed software is not a guaranteed to successful management information system. The in-house developers may fail to capture all the information needs of the bank leading to faulty management information systems.

Disparate Legacy

Merging disparate Information technology systems is a major challenge to Grameen Bank. The bank has been operating independent information system in all its branches. A management information system will lead to integration of operations in all its branches. In the process of integration, there will be certain challenges. The independent information system may not be easy to integrate. In the process, there could be wastage where some systems are considered incompatible with the new management information system (Oz, 2006, p. 106). The process of upgrading its system can result in applications, hardware and software that have to work together. As part of its expansion plan, Grameen bank intends to merge with other micro finance institutions. Some of the microfinance institutions already operated management system. Integrating the various information systems operated by the various institutions may lead to various legacy challenges.

To address disparate legacy, Grameen bank must have an elaborate plan for information management. Information needs of an organization changes frequently. Without proper planning, Grameen Bank can waste a lot of resources on frequent upgrade of its systems. Prior planning should enable the bank to foretell future information needs and be able to take the necessary steps to ensure smooth transition. The information needs of the bank should be well defined and selection criteria created. This will help the organization to acquire only the hardware, software or applications. A scalable Micro-finance management system will help the bank to respond to varying information needs.

Considerations for the Micro-finance Management Information system

Use of information technology is a major factor to competitive advantage of a bank. To be able to face challenges in changing business environments, Grameen Bank needs to increase usage of information technology. In implementing the management information system, certain considerations should be taken. As a microfinance management system, the system must be keen on security. The system should be able to protect the financial information of its client. Access criteria should be elaborative on the individuals that can access information in the system. The clients and other stakeholders should be confident that the system does not compromise their deposits or their financial information. The system should be stable in order to secure the information in the system. Data integrity and reliability should be guaranteed. The system should ensure financial reports are clear of errors and information from the system is reliable. The system should also be scalable and flexible to accommodate additional or varied features.

Reviewing Management Information system

Management information systems are intended to meet various information needs of individual organizations. For this reason, management information systems differ depending on the type, complexity and size of the operations (Klein & Hirschheim, 2001, p. 79). The specific needs of institutions dictate the features that should be included the system. In a financial management system, security, and data integrity are given more emphasis than other factors. The size of an institution has a high contribution to the features of management information systems (Lucey, 2005, p. 67). A system for small institution may fail to be effective in large institutions. Despite the differences in size, some of the features in the management systems may be common. In reviewing a management information system, size of an institution and complexity of operations should be given higher priorities. In addition, review of MIS should consider how the system helps in decision making and how it helps an institution to meet its objectives.


Management information systems have brought revolution regarding how organizations are managed. The systems help to organize information in an organization making management roles simple. Use of MIS helps to make better and timely decisions. Grameen Bank can benefit a lot by implementing a management information system. The banks will be able to have better management, make informed decisions and be able to face challenges of globalization. To implement the system, the bank should upgrade its information systems. The best option to acquire the micro-finance Management System is to outsource development of the software to a software developing company. This will enable all essential functions of the bank to be captured in the system.

Reference List

Dowla, A. 2006. In credit we trust: Building social capital by Grameen Bank in Bangladesh. Journal of Social-Economics, Vol. 35, No. 1, pp. 102-122.

Galliers, R. & Sutherland, A. 2008. Information systems management and strategic formulation: the stages of growth model. Information Systems Journal, Vol. 1, No. 1, pp. 89-114.

Klein, H. & Hirschheim, R. 2001. Choosing between competing Design in Information Systems Development. Information Systems Frontier. Vol. 3, No 1, pp. 75-90.

Lucey, T., 2005, Management Information System. New York: Cengage Learning.

Oz, E., 2006, Management information systems. New York: Cengage.

Robey, D. Franz, C. 1995. The Usefulness of Information Systems. Information Systems Frontier, Vol. 1, No. 5, pp. 87-97.

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