1. MIFOS ACCOUNTING STRATEGY By: Gigi, Kazeem, and Marie September 20, 2010

2. 2 Vision To provide an integrated accounting solution that addresses the financial accounting requirements of the MFIs, Investors and Creditors, thus helping them achieve operational efficiency and overall cost effectiveness

3. 3 Rationale  All MFIs, big or small, need an accounting solution to support their operations.  Small, off-the-shelf, accounting solutions will not scale up with growing MFIs. A more mature, stable, accounting solution is required in the long term to ensure that financial data is accurate and reliable and that integration with MIFOS is seamless. Providing for a mature, long-term solution will help MFIs achieve operational and financial efficiency.  Current MIFOS users have expressed the need to integrate MIFOS with their current or with a new accounting system. However, the variations in which MFIs configure and use their accounting systems will make it very difficult and costly for GFUSA to develop and support. At present, we are seeing multiple systems, across various countries that will require customized interfaces for each type of implementation. Building customized interfaces is not a sustainable solution in the long term.  The value of Cloud is diminished if MFIs will have to maintain additional IT staff to maintain a separate accounting system.  Moving MIFOS into a platform that offers an integration accounting solution is in line with both the Cloud and Marketplace visions.

4. 4 Operational Goal To be able to integrate MIFOS with an open- source accounting solution and offer it as an all-in-one financial “package” for MFIs

5. 5 Assumptions  GF will not develop its own accounting modules in Mifos.  Too much time and resources required  Though enhancements might be required to ensure that required financial data are captured  Open source accounting solutions are available for integration in the market  These solutions are mature and stable

6. 6 Strategy Roadmap Short-term (Current) Custom Integration Medium- term Evaluation of Open Source Accounting Systems Provide at least 3 of the most relevant accounting reports in MIFOS Long-term Integration with an Open Source Accounting System

7. 7 Whys and Whats of the Roadmap Short-term (current) Custom Integration Medium-term OSS Evaluation and development of at least 3 accounting reports Long-term Integrated Open Source Accounting Solution w/ Generic API Why? Most competitors offer integrated accounting solution All MFIs require an accounting system, we need to fill this need Open source is a requirement: This is key to the MIFOS values To immediately address accounting reporting requirements of Mifos users while the integration solution is being developed This will meet general MFI requirements at all levels/segments Having an integrated accounting solution is in line with Cloud and Marketplace visions Generic API will address the needs of MFIs who will not convert to our accounting solution

8. 8 Whys and Whats of the Roadmap Short-term (current) Custom Integration Medium-term OSS Evaluation and development of at least 3 accounting reports Long-term Integrated Open Source Accounting Solution w/ Generic API What does this require? Selection and implementation of various accounting packages Customized MIFOS interface for every accounting package Definition and development of at least 3 accounting reports in Mifos OSS Evaluation: Requirements Gathering Evaluation and Selection Development of enhancements and integration components Pilots Deployments Support

9. 9 Next Steps / Summary of Proposals  What’s next?  Marie and Gigi to get feedback on the initiative  Gigi to work with Ryan, Amit, Binny, and Kay to perfect this strategy by next week  Kazeem to share his notes on integration experience in Nigeria with an open source system  Proposals:  Approval of the strategy and the initiative  Formalize the team members  Gigi to spend 40% of her time to drive and execute strategy  Start the evaluation as soon as possible

10. 10 Discussion Notes

11. 11 Q & A 1.Is it possible to only have 1 accounting solution for all MFIs? No. Other MFIs will want to keep their systems. Thus, the Generic API. We cannot force the solution to MFIs who will want to keep their accounting systems.

12. 12 Q & A 2. Why offer an integrated accounting solution? An integrated accounting system will:  Be more affordable to the MFIs, thus increasing their operational efficiency and cost-effectiveness (ERP systems are expensive)  Even if the MFIs have a current accounting solution, they are usually off-the-shelf software. They will be needing to migrate into a more mature accounting system in a few years time.  Competitors offer integrated accounting solutions

13. 13 Q & A 3. Will the integrated accounting system address ALL accounting requirements of the MFIs? No one system can address ALL requirements, especially across varied countries and organizations. Every effort will be made to identify the high-value accounting requirements and this will be used as a criteria for evaluating the accounting solution. The functionalities will also be largely limited to what the solutions can currently offer.

14. 14 Q & A 4. What are the MAIN advantages of integrating with an open source accounting solution?  It is cost-effective  It will be possible to host both Mifos and Accounting in the Cloud platform. This will offer a huge advantage to MFIs.  It will be possible to use the same reporting tool for both Mifos and Accounting. Thus, increasing the reporting flexibility of the MFIs.

15. 15 Q & A 5. How long will this effort take? The proposed initiative is a phased approach. The timeline will be defined when directions and resources have been approved.