it/innovation fejér enterprise agency - European-microfinance.org

IT/INNOVATION
FEJÉR ENTERPRISE AGENCY - INTERNET-BASED
MICROFINANCE MANAGEMENT SYSTEM - HUNGARY
Objective: Counselling, providing information and performing microfinancing
activities
Target group: entrepreneurs, policy makers, business support organisations, professionals
Key words: Internet, website, tool, BDS, microcrediting, credinfo, microcredit MIS, business
education, e-learning
IMPLEMENTING ORGANISATION: FEA
Eva FARAGÓ
Budai ut 9-11
8000 Székesfehérvar -
Hungary
Tel: ++36 – 20 555 2909
Fax: ++36 - 22 337 355
E: farago@fea.info.hu
W: www.fea.info.hu
Regional Foundation for Enterprise Promotion of the Town of
Székesfehérvár (www.fea.info.hu) (short international name in
use: Fejér Enterprise Agency ® or FEA) was established as a
non-profit organization in 1991 in Székesfehérvár with the
support of the European Commission mainly to handle the
Hungarian enterprise development projects of Phare in Fejér
county. Székesfehérvár lies about 60 km to the west of
Budapest and it is the centre of Fejér county and the Central
Transdanubian Region. The
founders of the foundation include
the local government of Székesfehérvár, the Chamber of
Commerce and Industry of Fejér County, the Chamber of
Agriculture, several big banks, companies and private people.
Mission
The mission of the foundation is to support enterprises in various ways, including the
provision of assistance to start up and established enterprises, to solve special problems of
already existing enterprises (i.e. growth related problems, accessing sources, mediating
business opportunities and supplier contacts, etc.), and the development of the necessary
legal conditions.
Management and work organisation
The Foundation is managed by the Board of Trustees consisting of 13 people elected by the
founders. The operative activities are administered by the Enterprise Promotion Office with
six people and the network of experts consisting of about 30 professionals under the
management of the Managing Director.
Good Practices gathered by EMN – IT/Innovation - February 2010 1

Activities relating to enterprise promotion
Since the end of the Phare programme, the activities of the
Foundation have changed several times.
Owing to the significant investment promotion activities of
FEA, the ‘Trade Centre’ office block has been built in
Székesfehérvár (the registered office of the Foundation can
also be found here), the Alba Industrial Park has been
established (www.aiz.hu) and an airport project has been
started. For a long time the preparation of studies relating to economy and regional
development as well as adult education played a major part of FEA’s activities.
Currently the most important activity of FEA is microfinancing, but in addition to this the
foundation deals with training, and provides economic and financial advice.
On the basis of the authorization provided by Act CXII of 1996 on Credit Institutions and
Financial Enterprises FEA is a microfinance institution (MFI) entitled to carry out
microcrediting activities independently of banks.
THE GOOD PRACTICE: Internet-based microfinance management system
FEA has developed Internet based electronic service providing functions such as on-line
credit application, on-line credit assessment, and on-line enterprise development.
1- The internet-based microfinance management system:
On-line credit applications: microfinance registered clients can apply for a loan by
completing an electronic form. Once the form is completed and sent by Internet, the
programme coordinator is alerted (via SMS and/or email) and the internet-based
decision making process starts. The same service is provided to book-keepers and
credit brokers who, if registered, can send an on-line credit application on behalf of
their clients.
On-line credit assessments: once the credit application has been received, the credit
assessment process starts.
The process goes through four phases:
Phase 1: information sent online is considered during site visits where the credit
officer validates the information and records observations electronically. Earlier
credit information is also considered.
Phase 2: FEA credit experts record their opinion and give their approval (or
disapproval).
Phase 3: on the basis of collected material the FEA Censorship Committee votes.
Good Practices gathered by EMN – IT/Innovation - February 2010 2

Phase 4: closing of assessment procedure. The remaining process uses the “classic”
credit procedures.
2. Internet based enterprise promotion services: registered users can access free online
credit rating, company assessments, company database, and can create a microsite
for their own enterprise, etc.
3. In its microfinance programmes FEA has introduced special flexible interest rates
based on client repayment performance (i.e. normal interest rates are enhanced by
6% for clients with a 30-day payment delay, by 10% for clients with a 60-day payment
delay).
4. Revolving microcredit product: this is a service FEA offers to microfinance providers.
Client institutions encountering liquidity problems can ask FEA for temporary funding
by paying a commission fee to FEA. This service can also be accessed through the
Internet.
TARGET GROUP
FEA’s target group consists of business start-ups and operating, but inexperienced, micro
enterprises. FEA works in Székesfehérvár, which lies about 60 km to the west of Budapest,
and it is the centre of Fejér County and the Transdanubian region. FEA mainly operates in
Fejér county (its contracted sub-office network is located in Fejér county), but it can also
accept microcredit applications from outside the county.
RELEVANCE
In order to achieve the aims, it is always important to develop and improve the quality of the
services. Today more and more people are turning to the Internet for information and
services. This is especially true for the younger generation. With regard to the fact that this
younger generation is a marked target group in terms of microfinancing, it is evident that the
services have to be developed in this direction. The technology itself enables the provision of
complex services. The system developed by FEA is an integrated system which can provide
services for both the MFIs and their clients.
ACCESSIBILITY
The system is available for anybody. It has been operating in Hungary for about four years
and the scope of services offered by the system is expanding. The system is very easy to use
- it only requires basic IT knowledge. FEA has started developments to make the system
available on an international level and it will be accessible at the www.credinfo.eu portal.
Registration and basic services will be provided free of charge for MFIs belonging to EMN.
For microfinance clients all the services are free.
Good Practices gathered by EMN – IT/Innovation - February 2010 3

INNOVATIVENESS
There are no other systems like this in Hungary. It is innovative because it was developed by
using the most advanced technologies. It provides complex services (on-line credit
application, management analysis, business partner search, micro-site, complete intranet
credit assessment management system for the MFIs, etc.) for the various actors involved in
enterprise development (MFIs, microcredit clients, advisors, credit brokers, book-keepers,
etc.). A complex educational portal is also connected to the system.
IMPROVEMENT
Approximately 15 MFIs use various modules of the system officially. The Hungarian fund
manager (and the Hungarian Financial Supervisory Authority) accepts the use of the system
and the data-supplier interface in the JEREMIE microcredit programme.
With regard to the fact that FEA (the developer of the system) is a user of the system itself, it
is interested in further developing it.
The developer of the system has opened access to the system for the international users and
is seeking further co-operating partners. The essence of the developing concept is that the
developers are not developing commercial software, but are themselves the users of the
system and they finance the maintenance and development of the system together on the
basis of a joint interest. The business concept of the software developing company is to
develop a system providing high-quality services for the co-operating partners in such a
manner that it does not charge exorbitant development fees since it is interested in
operating the system in the long run. Thus, it finances the continuous development activities
by involving more co-operating partners that pay a lower maintenance fee. Currently, the
developers are searching for more international partners. For further information visit their
website at info@credinfo.eu.
EFFECTIVENESS / EFFICIENCY
Modules of the internet-based microcredit management system are used by approximately
15 Microfinance Institutions in Hungary. The internet based enterprise development system
was introduced in September 2009 in the Economics Courses at secondary and higher level
education in Székesfehérvár.
FEA Microfinance Outreach Achievements:
Dec06 Dec07 Dec08 Dec 09
Active borrowers 89 69 73 69
No. of active loans 329 289 250 261
Average Loan Size € 11,320 € 16,445 € 15,292 € 14,074
Portfolio € 2,905,458 € 3,223,127 € 2,309,141 €2,962,962
Sub-offices
Staff (excluding sub-
7 7 11 11
offices) 10 10 6
Credit officers (excluding
sub-offices) 3 4 3
Good Practices gathered by EMN – IT/Innovation - February 2010 4
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ADAPTABILITY / REPLICATION
Modules of the internet-based microcredit management system are used by approximately
15 Microfinance Institutions in Hungary. The system provides electronic services for both the
MFIs and their clients.
FEA aims to expand the use of this internet-based technology at an international level with
the support of the European Microfinance Network.
SUSTAINABILITY
FEA is funded by public funds (local and central Hungarian government) and income from its
microcredit programmes.
In the past five years 52% of the income of FEA has come from the microfinancing activity.
Due to the deteriorating economic conditions in Hungary (the availability of alternative
income sources has narrowed down), the importance of microfinancing has increased and in
2009 this income ratio might exceed 90%. In order to sustain the operation, FEA is striving to
involve as many microfinance donors as possible. It also makes an effort to increase its
efficiency by optimising the number of operating staff and the organisational structure (thus
optimising the proportion of internal and contracted workers). FEA also pays particular
attention to credit approvals.
MFIs using modules of FEA’s internet-based microfinance management system pay a
monthly maintenance fee to the software operator to maintain and update the system (€280
per month). FEA has provided the use of certain modules of the system to other enterprise
development agencies and MFIs, free of charge.
USEFUL LESSONS
FEA has found that the development concept and the direction it is going is the right one. At
the moment FEA is working on the development of a multimedia help function, which will
simplify the individual parts, in particular, the process of credit application. FEA would like to
integrate the multimedia help function and the customer service function. It also intends to
strengthen the CRM services within the system.
Sources
Website:
• www.fea.info.hu
Documents:
• Giordano Dell’Amore Microfinance Best Practices Award 2009: The experiences of
the finalists
Good Practices gathered by EMN – IT/Innovation - February 2010 5