Using Handhelds in the Field: ACCION International Empowers the Self-Employed Poor

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Using Handhelds in the Field: ACCION International Empowers the Self-Employed Poor

One of the pioneers of microlending, ACCION International is a private nonprofit organization with over 25 years of expertise in the field. Since 1973, ACCION and its affiliates have worked to reduce unemployment and poverty throughout the Americas by providing microloans - small, short-term loans to the self-employed poor. Microloans, along with business training, provide the support these micro entrepreneurs need to pull themselves out of poverty. ACCION's clientele - cobblers, street vendors, seamstresses and taxi drivers - traditionally considered "bad credit risks" by commercial banks, have proven to be quite the contrary.

The ACCION Network currently operates in 15 countries in Latin America and the Caribbean and in 23 cities and towns in the United States. In 2000, ACCION launched its first initiatives in sub-Saharan Africa. In Latin America and the Caribbean, first loans start as low as $100. In the United States, loans begin as low as $500.

Brooke Barton, Senior Associate of Communications for ACCION International spoke to TECH NEWS about ACCION's deployment of handhelds in the field.

How did ACCION International decide to embark on handheld technology?
One of the biggest challenges in micro credit is the high cost of making small loans. Poor people generally don't have collateral or a credit history, often can't be reached by phone and frequently live far from the city center. All these factors increase loan-processing time and therefore cost. Loan officers working in poor urban barrios usually travel by local bus to the potential borrower's home or place of work and take the application with pen and paper. They then re-enter the data into the computer when they get back to the office. Some loan officers have used laptops in the field, but they are expensive and their high value and conspicuousness pose safety issues for loan officers.

To meet this challenge, ACCION set out to streamline the lending process. An ACCION consultant, Chuck Waterfield, wrote specialized microlending software for the Palm Pilot. With the new system - CrediPalm - loan officers key in client information (goods sold, product costs and household expenses), which is easily uploaded to a central database. Before, loan officers recorded everything on paper. Back at the office all the data was input by hand. Now, loan officers can take applications quickly and make loan calculations instantly.

ACCION's Latin American affiliates have been using handheld technology for how long?
The first field tests for ACCION's customized microlending software on the Palm Pilot were held in May of 1999 in Mexico City. Called "CrediPalm," the new application can now be customized for both Palm Pilots and Visor handheld computers.

Approximately how many ACCION affiliates are using handhelds?
Currently, eight ACCION affiliates in Latin America have either completely integrated the CrediPalm handhelds into their programs or are in the testing phase. These affiliates are located in Mexico, Colombia, Peru, Bolivia, Ecuador, Venezuela and Guatemala.

How are they using handhelds in the field?
CrediPalm allows loan officers to:

Take applications, including on-site paperless client data entry, processing and assessment of:

Calculate credit scores
Calculate payment capacity
Make loan calculations on the spot
Upload data to a centralized database at the office
Pre-approve loan applications in the field
Have access to current and historical payment information
Have daily access to activity reports

What is the training for loan officers using the CrediPalm?
The training usually takes about a week. We can't stop the loan officers' activities so we try to accommodate their schedules. We advise the micro finance institution to give the Palm units to the loan officers a couple of weeks prior to the introduction of CrediPalm so they can become familiar with the tool. After that, we take them to a classroom for a full day of training and then to the streets to conduct a parallel process of filling in loan applications.

Has analysis been done on how the CrediPalm is working for ACCION's affiliates? Has there been improved data management? Faster, more accurate reporting?
We are working on that - we expect to have a full analysis at year's end. So far, we have cut the time processing a loan by 35 percent; we don't know yet whether its affected portfolio improvement.

What have been the benefits?

Reduces loan application time by 75 percent: Using the Palm Pilot, loan officers can complete an application in 15 minutes versus the usual one hour.
Eliminates the time-consuming task of manually re-entering data recorded in the field on office computers.
Allows loan officers to take into account intangible qualities of the loan applicants, which are essential when lending to poor people (e.g., references from customers and the loan officer's impression of an applicant's character).
Gives loan officers more time to follow-up with existing clients.
Gets loan officers away from pencil and paper approach - saving approximately 25 sheets of paper per loan.
Gives clients exposure to technology.
Palm Pilots are relatively affordable.
Safer for loan officers than laptops - less conspicuous, so they are less likely to be stolen.

Have there been any drawbacks?
Rather than one set CrediPalm application, ACCION must customize applications adapted to the specific conditions and needs of each microlending institution and to each institution's particular Management Information Systems (MIS) configurations. Because of this, it's difficult to assess overall functionality. One particular application might handle a certain task (basic credit scoring for example) that another won't.

Expectations tend to be very high when technology is used to fight poverty, but it's important to realize that the use of the CrediPalm is not a magic recipe for success. The CrediPalm application only reflects an underlying credit process; it won't solve its shortcomings. A strong, consistent and stable credit methodology will always be a key to microlending - the CrediPalm won't erase that. Similarly, a successful implementation requires a well-functioning MIS.

When did the first discussion of using handheld technology come up at ACCION New York?
In late 2000, the CEOs of two ACCION U.S. associates (ACCION Texas and ACCION New York) went to Mexico City to see firsthand how Compartamos had employed ACCION's CrediPalm technology to streamline their lending process. Both the Texas and New York programs are structured using a centralized loan processing system in the headquarters office, with smaller satellite offices located strategically around the state (Texas) or the city (New York). Currently, loan officers working out of satellite offices take loan applications by hand and fax or e-mail the applications to the processing center.

Compartamos has a similar central office and satellite office structure and has used the CrediPalm application to reduce the amount of time loan officers spend gathering and transmitting information to the processing center in Mexico City. The ACCION Texas and New York CEOs were interested in seeing how this software could be applied to their own programs to increase efficiency and reduce costs.

In addition, the idea of using handheld computers was also attractive to the New York program, because, as in Mexico City, the program was concerned about the safety of loan officers lugging around conspicuous laptops in high crime neighborhoods. The handheld, alternatively, was much more easily concealed.

You can contact Brooke Barton at bbarton@accion.org.

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