Expanding reach through the cloud

Helping entrepreneurial women

Founded in Queens, NY, in 2008, Grameen America is a nonprofit that builds on the legacy and proven model of Nobel Peace Prize laureate Muhammad Yunus. His revolutionary idea that all people can lift themselves out of poverty through their own entrepreneurial spirit has dramatically altered how the world views global poverty.

Grameen America provides microloans, financial education, and support to women who live below the federal poverty line, for whom the mainstream financial system is out of reach. Unlike most commercial banking institutions, Grameen America utilises a group-lending model where women are guided by a Grameen America loan officer and can receive a loan of up to $2,000 initially, with larger loans available later on. The strength of Grameen America’s model is its focus on community lending where the peer support and monitoring system serves as a strong motivator for each borrower to repay their loan.

Move to the cloud

By 2013 Grameen America was serving more than 25,000 clients and felt that it was time to scale. Until then, Grameen America was relying on the gBanker software that was custom-built in Bangladesh for Grameen Bank. While the legacy software supported the bank’s unique lending model, it was better suited for the Bangladeshi context than the US one. After exploring the choices, Grameen America’s technology team recommended migrating from the legacy server-based system to a cloud native system that would:

1. be easily accessible from a mobile device,
2. ensure less or no downtime.

To test how a new solution would perform and whether it is the right cultural fit, Grameen America’s tech team took a decision to run a pilot. They chose Mambu because of the platform’s high flexibility and the scalability of the systems, and the rigour on the team and processes.

Solution & implementation

Grameen America and Mambu engaged in an initial stealth pilot followed by a second pilot. The goal was to test whether an off-the-shelf solution could perform on par with, and in many ways better than, the legacy gBanker solution. The pilots demonstrated that Mambu’s platform could radically improve Grameen America’s key operational functions. Both pilots played an important role in building a buy-in within Grameen America’s senior leadership team and in ensuring that Mambu’s platform would be accepted by the frontline centre managers and borrowers.

The national roll-out of Mambu’s platform took place over the course of nine months, as it occurred gradually, region by region. Before the official roll-out, all staff also went through a six-to-seven week pre-migration training process. All of Grameen America’s departments made use of Mambu’s sandbox environment, which allowed them to understand how Mambu works with no impact on the system in real-time.

Results

The move to the cloud improved Grameen America’s loan processing and overall borrower experience and enhanced internal and external auditing capabilities. Enhanced data accuracy resulted in better data analytics and Grameen America is now able to conduct surprise audits and to detect fraud based on data irregularities.

Until mid-2020, Grameen America made use of Wirecard, the now-insolvent German payment processor, for its electronic payment transactions. When on 26 June, 2020, without prior notice or warning, the UK Financial Conduct Authority suspended its permission for Wirecard Card Solutions Limited to operate, this affected thousands of companies globally, including Grameen America. However, thanks to Mambu’s robust API, Grameen America was able to swap out the connector and implemented Prepaid Technologies, their current third-party solution for disbursements, in less than three weeks. As a result, the business experienced no interruption in their operations.

Through open APIs, Mambu seamlessly integrates with other off-the-shelf software solutions, giving even greater benefits to Grameen America’s borrowers. For example, Grameen America implemented compliance-related software and disbursement cards for loans quickly and easily.

The organisation’s loan transaction time was reduced by 50% and the caseload benchmark grew by 25%. Since Grameen America moved to a 100% digital disbursements and repayments, the organisation has become more than 60% financially sustainable. Lastly, by becoming digital, Grameen America also laid the groundwork for its borrowers to also become digital.

Grameen America has tremendously contributed to financial inclusion and is operating in 19 cities across the US. The nonprofit has invested over $2 billion in more than 150,800 low-income women entrepreneurs since January 2008.