Automation of SACCOs - FSD Kenya

5. Orbit (Neptune)
Fulfilment of requirements: Orbit is a derivative of Neptune’s Equinox,
which has been adapted to suit SACCOs. The system is deemed sufficient, but
has a few shortcomings. The teller functionality is satisfactory. Different teller
types with configurable rights are provided. Rules can be applied to standing
order to make certain transactions under certain conditions. To enable
integration with an ATM network, the acquisition of an external module
connecting the application to a switch is required. Customers are identified
by a unique reference number. The assignment of customer types enables
classification and respective reporting. Also products can be restricted to
certain customer types. The provided search functionality is strong. However,
the data model of the application is unclear with regard to the necessary
synchronisation of FOSA data to the BOSA module. FOSA and BOSA data
appear not to be stored on one central database and synchronisation between
the two is necessary.
As far as loan application processing is concerned, the system offers flexible
configuration options with regard to payment schedule, payment method,
interest calculation, and disbursement. Apart from the base rate, a margin
interest per customer-product-relation can be added. The user can also define
the verification of security using borrowers’ shares, collateral, and guarantors
and the prioritisation of payments in case of delinquency. The system features
what-if analysis to illustrate the change in payment schedule given different
assumptions and choices. However, the system offers only limited features to
present the outcome of the appraisal process or any details on the outcome.
The user cannot easily understand why an application was rejected and
what the applicant could do to be eligible. Whenever details of a particular
loan such as payment method are changed, the payment schedule seems
to only be adjusted after the end-of-day (EOD) procedure is completed.
Additionally, the system would need customisation for suspending interest
beyond a certain period of delinquency. While the system can classify loan
performance according to the WOCCU categorisation, it does not offer credit
scoring functionality and only very basic collateral management. The system’s
accounting functionality is deemed sufficient. The CoA is fully customisable.
Moreover, the system enables the user to specify how transactions are to be
posted based on e.g. product and transaction type. Postings can be tracked by
product, branch or any other segmentation. An administration module tracks
any incorrectly posted transactions.
Orbit product configurations options are deemed comprehensive. As the
system is a simplified and down-scaled version of Neptune’s core banking
system Equinox, it is very scalable as additional Equinox modules can easily be
reintegrated. The usability of the solution leaves room for improvement. The fact
that FOSA, system administration, report wizard, EOD procedure, and account
processing (BOSA) are different modules and need to be accessed individually,
could create inefficiencies. Using two different report writers, Crystal Reports
for FOSA and CENTURA for BOSA, makes usage more complex. While a clearly
AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS • 43
structured toolbar facilitates navigation, labelling is deemed insufficient,
abbreviations being unclear and button labels being too short. Colour should
be used for emphasis, e.g. highlighting mandatory fields. The security features
of the system are considered sound. Access can be restricted on modular as
well as field level. Users can also be restricted from accessing specific customer
data, particular GL accounts or dormant accounts. Transactions limits can be
set and authorisation processes are enabled. Restriction options for periods of
link downtimes help to prevent the risk of abuse where data is not coordinated.
The audit trail features can be improved by using meaningful labels and not
database field names. The export functionality is considered insufficient as
exported data is not clearly arranged in Excel and it needs rework before it can
actually be used for analysis. Moreover, the import functionality is insufficient
as it does not seem to enable flexible definition of mapping different data
formats and structures.
Cost: Neptune offers their solution as both local installations as well as a
centralised setup under the ASP model. With regard to local installation,
Neptune’s cost estimates were approximately twice as high as estimates from
vendors such as Craft Silicon or Fintech. This was the case for both standard
SACCOs. Although the project team is aware that the estimates can only serve
as rough indication, the price difference between the mentioned vendors
seems substantial. Also with regard to the ASP option, Neptune’s asking price
is considered relatively high. Taking the provided information into account,
the project team estimated the cost for the two standard SACCOs to amount
to almost the same price they would need to pay when acquiring Bankers
Realm or FinSacco, with the substantial difference that they did not own an
asset at the end of the year. From year 2, the estimated costs for a continued
use of Neptune’s service would be almost five times higher than the annual
maintenance fees of one of the other vendors, meaning the putative cost
advantage of engaging an ASP could not be realised in this case.
Application maintenance and support: The support structure in
place seems to be appropriate. Neptune has more than 30 staff in their Nairobi
office that can support implementations as well as maintain and develop the
application further. Their specific experience is still limited, as Orbit has only
been implemented in two Kenyan SACCOs so far. It needs to be stressed that
none of them is operating on the ASP model yet but have local installations.
Embu Farmers’ SACCO is scheduled to go live on the ASP model some time
next year. It will then need to be confirmed that Neptune can deliver the
proposed service.
recommendation: To conclude, Neptune’s solution Orbit offers the
functionality necessary to support a SACCO’s operations. However, there
is room for improvement with regard to fully integrating the solution and
making it more SACCO-specific. Given the observed price difference between
Neptune’s estimates and those of other vendors such as Craft Silicon or Fintech,
the project team only recommends Orbit as a secondary option as there seem