Evaluate Software

BUILDING FINANCIAL SYSTEMS FOR THE POOR
WARNING
The following review was conducted in 2002. CGAP is currently performing a new set of software reviews.
Please check the CGAP web site www.microfinancegateway.org/resource_centers/technology for the new review.
CGAP
CGAP Information Systems Consumer Report
Full Report
Product Evaluated
eMerge
Release 1.0, Windows
Software Provider
Tenemos-DBS
February 2001
Disclaimer – Neither CGAP, nor the participating vendor, nor the microfinance institution visited
for this evaluation will be liable for any damages, or losses suffered due to decisions based on
the information provided in this report.
CGAP Information Systems Consumer Report - eMerge February 2001
About the Consumer Reports
The CGAP Consumer Reports were developed to assist managers of microfinance institutions in the
process of selecting software to track their core information needs, such as loan portfolio and accounting
information. The reports are not intended to replace the due diligence process required by an MFI to
identify appropriate Information System (IS) software. Rather, the individual reports, combined with the
comparison charts, are intended to propel a microfinance organization further along in their selection
process without having to expend a great deal of staff time to conduct an initial scan of available options.
For more information on the software selection process, see the Software Selection Guidelines.
The Application Selection Criteria
To be considered for review by the CGAP IS Service, a software application for the microfinance market
must meet the following requirements:
1. Commercially available off-the shelf application.

2. Microfinance client base (multiple clients).
3. Installed & supported in more than one country (for the initial round of reviews).
4. Supports individual & group lending methodologies (or has the potential).
5. User interface available in more than one language.
6. Continued commercial market potential, defined as
§ Sustainable technology (i.e. platform, programming language & database)
§ Investment in on-going product research and development
§ Defined product development cycle
§ Defined process for beta testing and controlling new releases
Once selected by CGAP Consumer Reports Service for review, the software vendor must agree to
participate in the evaluation process.
The Review Process
The evaluation process follows three main steps—a request for information from the software vendor, a
review of a software demonstration, and a site visit of a microfinance institution using the software
product under review.
A standard RFI (request for information) is sent to the software vendor to gather data about the product
under review and the company. This information is first verified through a software demonstration,
privately if the software vendor can provide a demo disk/file, otherwise, through a live demonstration.
Secondly, the software is evaluated within a microfinance institution using it. Following the site visit, if
necessary, information is clarified with the software vendor. Once the report is written, a Technical
Review Committee, comprised of individuals with extensive experience in microfinance, systems
development, and software evaluation review the report for consistency, fairness, and transparency. At
least one member of the committee is a CGAP employee, but the other members of the committee work
in the public and private sector, both in the microfinance and technology industry.
The Report Rating Scale
Each software application is rated in six separate areas, but a composite rating has purposefully not been
given to the product because priorities for different functionality vary greatly institution to institution. It is
also important to note that the software applications are not being compared against one another, for
some are meant to serve large regulated banks, or credit unions, and others are meant to serve the
needs of medium to small microfinance organizations. Rather, the applications are being compared to
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the generally accepted industry standards, either in microfinance, software or accounting. The evaluation
criteria are based on the “Microfinance Best Practice MIS for MFI Evaluation Framework”, developed by
Andrew Mainhart. The software application is evaluated according to six aspects: Functionality And
Scalability, Usability, Reporting, Financial Standards and Compliance, System Administration and
Technical Support, and Technical Specifications. A microfinance organization should look at each
individual rating given by CGAP in relationship to the priority they have assigned that particular
component of software or services provided.
Poor Okay Best
The rating scale used for the evaluation is a five-point scale with a crying face being the lowest and a
cheering face being the highest rating. In between, from lowest to highest are a crooked smile, a straight
smile, and a happy smile. The more pleasing the face, the better the product is in that area. A lowest
rating would indicate that the product is either missing basic standard features, or the features do not
function properly. A highest rating would indicate that the product has all the standard features, plus
additional features in the given category, and the features provided function properly. A middle rating
would indicate that a product has close to or all the standard features, but no additional features, and/or
the features may not function properly. The rating criteria holds true for the categories that include
services provided by the software vendor.
Given the limitation of the evaluation design, available resources for the project, the desire to review the
most currently available version of the software, and the need to keep the information as timely as
possible, it is not possible to evaluate all the features of each software application. Again the core
purpose of the report is to provide MFIs with a strong position from which to begin a due diligence
process. A core set of features is reviewed for all applications, and if a specific feature is not verifiable, it
is noted. Any extra information obtained through the evaluation process is included in the Appendix.
Evaluation Dates: September 2000 – February 2001
Evaluation Author: Joseph Kotun, echange, llc

Laura Frederick, echange, llc
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Product Summary
Product: Historical Products

Temenos eMerge Release 1.0, Windows DOS based product,
Progress based product – full system
Work Station Operating System Server Operating System
Windows 95/98/2000 Windows NT (with service pack 4 or 6),
Windows 2000 Server
Networks Supported
Windows NT, Windows 2000 Server
Software Language(s) User Interface Language(s)
UniVerse Basic, JBase English, French, Portuguese, German and
Spanish. Help menu available only in English.
Others under development.
Database Base Price
UniVerse, (SQL and ODBC compliant) $5,832 and $23,085 per user for a 5 user
JBase system; $3,900 – $10,500 per user for a 15
user system; $2,400 – $6,000 per user for a
50 user system.
CGAP Consumer Report Rating
Functionality and Scalability
Usability
Reporting
Financial Standards and Compliance
System Administration & Technical Support

Technical Specifications
Suited best for medium to large microfinance institutions with teller operations and 10 to 15 or more
concurrent users.
Functionality and Scalability
The rating of the eMerge product for functional and scalable capacity is based on three areas: 1)
functional completeness, appropriateness, and integration; 2) expandability with institutional growth, both
in volume and organizational structure; and 3) flexibility to track financial products according to business
requirements.
1) Functional completeness, appropriateness, and integration
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eMerge is based on a full commercial banking software package. This includes seamless modules for
accounting, including general ledger and a comprehensive list of standard reports, as well as savings and
loan portfolio management appropriate for any individual or group lending model, including apex
institutions and credit unions. eMerge includes functionality for non-financial client information files,
savings, investments, front office teller and cash management, and full security profiling. eMerge also
includes a tracking feature for the loan application process, with a check list for each loan approval stage.
Accounting
eMerge is very flexible in its capacity to track cash flow, revenues, and expenses by profit/cost center,
donor, account, and products on a cash or accrual basis. Information can easily be aggregated with user-
defined combinations of up to eight variables. This allows the MFI to generate nearly any combination of
disaggregated or consolidated data according to the many demands made by management, donors, or
regulatory authorities.
Most industry-standard assets, liabilities, income and expense accounts are pre-defined within a
framework of numeric codes numbered from 1000 - 70000. While eMerge allows the user to create
accounts and sub-accounts within the framework, it is likely that an MFI will need to modify its chart of
accounts to conform to eMerge’s structure. Overhead expenses can be defined through the chart of
accounts or tracked through the journal. If an MFI is for some reason restricted to a specific set of codes
within the chart of accounts, eMerge data would need to be exported to another accounting or
spreadsheet application for reporting purposes. MFIs with significant fixed assets in the form of
properties, vehicles or various equipment would also need to adhere to the predefined way of adjusting all
depreciation manually through journal entries.
eMerge also includes a general ledger that allows accounts to be exported or imported to/from a central
file for data consolidation at a head office. eMerge has no special function built in to permit entry of non-
portfolio or deposit-related income and expenses; these must be entered through the journal. Institutions
that integrate non-financial services into their programs will need to consider this limitation and either
make extensive use of manual journal entries or use a different, separate application for accounting for
non-financial services. The software currently has interfaces with Sun Accounting and Pastel Accounting.
eMerge currently has no payroll functions, but a customized module may be requested from DBS at
additional cost.
Loan Portfolio Management
One of eMerge’s greatest benefits is in its flexibility in the portfolio module. eMerge can be used to track
portfolios for any individual or group lending model. It tracks group cross-guarantors with no limit on the
number of guarantors per loan contract, and can track group loans as well as individuals within groups,
e.g. as required by the Grameen lending model. eMerge’s portfolio tracking is fully integrated, linking
membership, savings and loans each with a unique number. As with the accounting module, the user
can choose to track the portfolio on a cash or accrual basis. The portfolio module has the capacity to
track forced deposits separately from loan payments and voluntary deposits. Forced savings are linked
to loans; the system also has the ability to track collateral, which can vary from a house to an account or
a deposit within the system in a collateral module. In addition, there is also an actuarial real amortization
tool that can handle the inclusion of loan insurance as part of the calculated monthly payment amount,
which can be set up as a fee.
Transactions in the portfolio module are approved and posted before they are transferred to the
accounting module with an audit trail. This allows a user with appropriate authority to guard against fraud
and track errors in data entry. The system can issue checks to individuals or groups. Account numbers or
member names can be cross-referenced through the customer menu.
The process of creating new financial products is quite simple—a user defines every product parameter
from a series of drop-down menus on a single screen. eMerge allows a wide variety of charges, fees and
commissions to be tracked during the life of the loan agreement. Fees on late payments may be set up
as either a fixed amount or a percentage of the installment or loan balance. Suspension of fees,
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deferment of loan payments, refinancing of loans can be managed by eMerge, with an audit trail available
for tracking these modifications. eMerge also handles term loans, irregular payments, and balloon
payments, such as those appropriate for agricultural activities. The portfolio calculates the pay-off value
of a loan for early, late, and partial payments allowing an MFI to serve borrowers with greater flexibility.
The system allows user-defined payment frequencies, as well as on maturity or an ad-hoc basis.
Financial product parameters can be amended at any time, while tracking existing loan agreements that
continue under the conditions originally agreed to. This allows an MFI to experiment and fine-tune a loan
product’s conditions to best balance client needs and institutional profitability without completely re-
defining and renaming a loan product for tracking purposes. If a loan product’s conditions are modified,
eMerge tracks existing contracts with the original conditions, and future disbursements under the new
conditions. However, an MFI needs to be aware that eMerge’s standard reports track products by name,
but not changes to conditions. This may give misleading results, for example, with analyses of
profitability where a given product conditions have been modified. However, an additional report writer
tool will enable the user to define specific reporting requirements with more precision.
The portfolio module has the capacity to track active portfolio, delinquency, number of clients, etc., by
various levels and breakdowns, such as regions, branches, satellite offices, loan officers, credit manager,
and loan types. The portfolio aging mechanism and delinquency calculations can be user defined, to
allow an MFI to report these by the various definitions required by management, donors, or regulatory
standards.
Once a client account or investment is held as security for a loan, eMerge has the capacity to flag a
problem, blocking an account so that funds will not be released without the necessary mandated authority
which is set by the system user’s profile. Reports generated through the end of day process warn users
about delinquency, cash standing, productivity, through reports that are produced at intervals as set up by
the user through the end of period processing. In addition, an electronic diary facility is provided for
triggering follow-up actions for items like business, title or insurance renewals, balloon payments, or pay-
off within X days.
The present version of eMerge does not offer credit scoring. This is a serious consideration for an MFI
involved with individual, collateral-based small business lending. eMerge also does not presently offer
advanced functionality such as credit cards or smart cards. This may be a future limitation for a large MFI
looking to adopt these technologies. According to the vendor, if this type of functionality is required, the
user may elect to migrate to the full Globus software.
Deposit/Savings Management
Four types of savings products are built in to the system, including savings deposits, share accounts,
passbook accounts and term deposits, which cease to accrue interest on a set date. Others can be user
defined to accommodate the addition of different deposit types, including group accounts, and individual
accounts referenced to a group, or as compulsory savings tracked to loans. Each deposit entry is date,
time and operator stamped and cannot be deleted; errors must be corrected in the journal, which leaves
an audit trail. This feature prevents fraud and irreconcilable errors in the entry of savings transactions.
Deposit interest may be calculated according to user-set parameters and may be paid on an average,
daily, highest or minimum balance, and accrued on a daily, weekly, bi-weekly, bi-monthly, monthly,
quarterly, semi-annually, or annually. Interest may also be posted using any of these frequencies, with
the provision that the posting frequency is not shorter than the accrual frequency. This can allow for
batch processing at any interval needed by the MFI. eMerge allows for identification of beneficiaries in
case of death or incapacitation and has an option for jointly held accounts without limitation as to the
number of account holders. eMerge also has tax-withholding functionality, and can track dormancy for
inactive accounts. The inactive period is user-set. The system produces a report of all inactive accounts
through day end processing. This report may also be run on an ad-hoc basis.
Client Relationship (Information) Management
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The ability of a MIS system to track non-financial client information is invaluable for the purposes of
product design, marketing, profitability analysis, and client impact. eMerge includes a Customer
Information File (CIF) for individual customers as well as customers such as member institutions, lending
groups and village banks. The individual CIF consists of pre-defined fields as well as a number of
additional user-defined fields.
According to DBS, eMerge will track clients at different levels, such as individual to group to center to
village bank. The relationship is set in the CIF and inquiries can be designed around user needs. The
eMerge software product can search and sort by mnemonic, account number, customer number, or
name. In the CIF module a validation of all clients takes place to prevent duplication. This is particularly
useful when several clients of an MFI may share the same name. This validation is set in a mnemonic
field, which brings up a customer record by typing only a few characters, saving time. Should a client’s
information be duplicated, a warning message informs the user that the client already exists. The user
then has the opportunity to check information before continuing. This function prevents errors in
transactions or reports through erroneously entering data for the wrong client with the same, or similar
name. The following table lists the standard client information fields in eMerge.
Individual Personal Individual Business Group Information

Information Information
Mnemonic Type of business Mnemonic (system generated 8
(System Generated–3 characters of Target characters of group name and 2 system-
surname, plus I char of Initial, yymm of Account Officer generated digits used to avoid
birthdate, and 01, 02 etc as first or Other Accounts duplication)
second time that combination is entered Name of Bank, Branch Group name
into the system) Account No. Abbreviated Name
Name User-defined banking detail fields Date Registered
Former Name Registered Years
Title Registration Number
Initials Customer Opening Date
Opening Date Group Business Information Customers Language
Nationality Entity type
Identity Documents Sector
Passport/ID card number, expiry Business Type Industry
Language Start Date Target
Address, physical and postal Monthly Turnover Account Officer
Postal Code Blocked Customer Status
Date Occupied Classification Nationality
Years at Current Address (calculated) Contact Name Address-physical and postal
Employment Status Contact Position Postal Code
Profession Contact Work Number Date Occupied
Income Level Contact Home Tel Number Years at Current Address (calculated)
Employers Name Contact Mobile Number Relationship Indicator
Address details for employer Contact E-mail Memo of Association
Department of Employment Contact Fax No Articles of Association
Date Employed Other Accounts- Certif. Of Incorporation
Marital Status Name of Bank, Branch Founding Statement
Related Customer Number Account Number Certif. To Commence
Related to Customer (e.g. brother, wife) 2 user-defined banking info fields Trust Deed
Tax information Signatories- Partnership Agreement
No. of Dependents Signatories Name Constitution
Date of Membership ID/Passport Number Change of Name
Signatories Telephone Number Membership Since
Auditor Name Savings Account Since
Auditor Telephone Number Savings Account Years (calculated)
Group Member Name
Group Member Date of Birth
Group Member Gender
Text Comments
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2) Expandability and Institutional Growth
As eMerge is designed for large-scale institutions, it is unlikely that its expandability in terms of volume of
clients will be a serious issue for most MFIs. According to DBS, eMerge’s core Globus banking system is
used by clients including large commercial banks that have many thousands of customers and up to 6000
concurrent users. The limiting factor will be the computer hardware, operating system and network that
the MFI chooses to use with eMerge. If more than 50 concurrent users are required, DBS recommends
an upgrade to the full Globus application. Functionality that is not already included in the present version
can be added at additional cost, or offered in future versions, given sufficient market demand. Some
MFIs may wish to inquire about the possibility of client rating, electronic transfers, credit/smart cards and
other technology-intensive functions that are presently not available.
3) Flexibility
Customer-centric or Account-centric
DBS positions its technology for financial institutions that fall below the scale of traditional large
commercial banks, and targets medium and large microfinance service providers. According to DBS, its
nd
technology can be scaled from large 2 tier banks to very small MFIs with a few hundred members.
eMerge software is client-centric, allowing one customer to have many accounts. This makes eMerge a
product that is very flexible, and can support the addition of new products and increased rigor in
accounting standards that many growing MFIs eventually face. The tables following summarize the wide
range of features eMerge supports.
Institutional Types Lending Methodologies

Full-Service Banks X Individual clients X
Limited-Service Banks Cooperative X Solidarity groups with individual loans X
Savings & Credit Societies X Solidarity groups with group loans X
Credit Unions X Village banks with individual loans X
Microfinance Institutions X Village banks with group loans X
Limited Liability Companies Other X
Foundations Or Trusts X
Other X
Loan Product Types Loan Interest Calculations

Commercial X Flat X
Agriculture X Declining balance X
Construction/Home Improvement X Fixed rates X
Discounted from the loan X
Capitalized X
Floating/Variable rate X
Stepped rate X
Other (user defined) X
Savings and Deposit Account Types Savings and Deposit Interest Calculations
Passbook with passbook Day of deposit to day of withdrawal X
Passbook without passbook X Minimum daily balance X
Term deposits (i.e. certificates of deposit) X Minimum monthly balance X
Group savings X Minimum quarterly balance X
Off-book group savings Average daily balance X
Demand deposits X Average monthly balance X
Overdraft accounts Other (user defined) X
Current accounts -
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Payment Types Payment Methods

Term loans with constant payments X Cash X
Term loans with constant principal X Cash in different currencies where appropriate X
Irregular payments (set by the user) X Check Credit card
Single payment X Smart card
Balloon payments X Money order X
Selection of initial and subsequent X Check X
payment dates
Payment Frequencies Payment Year Supported

Daily X 365 days X
Weekly X 360 days (30 days/month) X
Biweekly X 336 days (4 weeks/month) X
Semi-monthly X 52 weeks X
Once every four weeks X Other (user defined) X
Monthly X
Bimonthly X
Quarterly (every 3 months) X
Special Payment Modifications Additional Types of Payments

Permits the suspension of penalty fees X Commissions and fees X
Permits deferment of loan payment X Penalty fees for late payments X
Permits grace periods X Credit Insurance X
Permits refinancing (recalculation of X Group insurance fees X
payment amounts) of loan
Other (user defined) X Other (user defined) X
Multiple Branch or Regional Offices
eMerge can be used in different ways with institutions that have varying degrees of decentralized portfolio
management and accounting. The software is capable of off-line batch processing. Remote branch data
can be managed with an application owned by Global Technology, called eMerge Branch Utility. MFIs
operating in remote regions or areas that lack communications infrastructure would find this functionality
to be quite useful. With this application, the user at the remote branch captures transactions for their
customers off-line. At the end of the business day the program produces a compressed and encrypted
batch file. The batch file is then sent via e-mail, or hand delivered via diskette to the main office where it
is processed against the relevant accounts effective dated for the date of the date it was captured.
During the end of day processing, the main system is able to generate reports which can then be
delivered to the branch, again by email, dial up or by diskette. The branch works from off-line information
showing balance, transactions histories etc., until the next opportunity to interact with the main office.
The MFI visited was only using the software in the central office, so the quality of this functionality is
unknown.
Multiple Languages
eMerge is currently available in five languages - English, French, Portuguese, German and Spanish.
Other languages are in process, and will be based on demand. The help menu is currently available in
English, French and Spanish, but if required, could be translated into any language by a local partner of
DBS. The absence of an understandable help menu could be very frustrating for an MFI, particularly
during the initial months of data conversion with the inevitable dual problems of inexperienced users and
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installation problems. The MFI visited for the review found the English version help menu language to be
too technical for easy use. Since that time however, the vendor has indicated that the full Help has been
re-written in a way that MFIs may easily understand, with full flow diagrams of processes etc.
Multiple Currency
Multi-currency is fully supported and can be accounted for in the desired currency or base currency. The
system does not however perform treasury or foreign exchange related functions, e.g. foreign exchange
exposure and currency dealing.
Management Considerations
♦ New Product – This version of eMerge is new to the market and the performance has yet to be
tested by an institution with large data demands, which may or may not be a problem.
♦ Hardware Requirements – Given eMerge’s relative size and complexity, a larger investment in
computer and network hardware and operating systems will need to be made, more than would be
necessary for a simpler software package.
♦ Functionality and Price – Given its large menu of functions and features, its expandability and its
relative high cost, eMerge is most appropriate for medium to large-sized institutions and institutional
networks that have 15 or more concurrent users on the system.
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Usability
The usability of the eMerge product is based on three categories: 1) the friendliness of the user interface
determined by the navigational architecture of the software along with consistencies across screens and
menus; 2) the ease of use with which needed tasks, such as end-of-period processing, can be performed;
and 3) the quality and availability of user training, support and resources, both online and printed.
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1) User Interface & User-Friendliness
A major strength of eMerge is the software’s user interface. A user has a set of easy to understand
buttons with text descriptions that link seamlessly to the system’s various modules. Navigation through
the system is easy, with a minimum of clicks to move from one module to another. Resting the pointer on
a button reveals a balloon that describes each button. The interface contains drop-down menus where
appropriate. Clicking on boxes containing data allows the user to drill down in an intuitive manner into the
system for more detailed information. All users surveyed at the MFI visited were pleased with the eMerge
interface. For example, to define a new loan product, an authorized (set by name and password) user
can enter a new chart of accounts code within the parameters set by eMerge. The user then goes
through a checklist of loan attributes such as interest calculation method, interest rate, term, period, fees,
percentage of loan requiring security, etc. A system change such as this would require additional
authorization of a second person at the same or higher security level.
2) End-of-Period Processing
eMerge is also user friendly in its end-of-day processing. The process must be first authorized by an
appropriate user, then takes just a few clicks to complete. This took about fifteen minutes at the surveyed
MFI. Prepackaged reports are also easy and flexible, with the user defining the report parameters.
Reports appear on the screen with the option of printing and saving them. Data can also be exported to
MS Excel for analysis.
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3) User Training and Support
Currently, DBS offers five full days of training in a structured environment with a well-designed training
manual in English (for a separate fee). Two MFIs were surveyed regarding their training experience with
DBS. One of the MFIs, a beta site which received its training in early to mid 2000, felt like the training
was really insufficient and not appropriately modified for differing user competencies and responsibilities.
Specifically, the IT staff of the MFI visited reported a desire for more explanation of the system
architecture and technology, while the front office staff felt like the trainers moved too fast given their
previous computer experience. The second MFI surveyed, which received the training at the end of
2000, found the training to be quite good and very useful. Clearly, there has been some strong
improvement by DBS in this area. Nonetheless, as part of a thorough due diligence process an MFI
should speak directly to references regarding training as well as the functionality of the product.
To date, DBS has also not produced any training materials or instruction manuals for the front-end user or
system administrator. The on-line help menu was only recently added, several months after the
customer’s installation. As of this report, the users did not have much time to explore the help menu, but
a brief review revealed that the language may be overly technical for most users. Future customers may
suggest to DBS to rework this, writing step-by-step instructions for at least the most common procedures.
It should be kept in mind that eMerge is a new product, and the first installation has been only recently
completed. These usability and training issues can be improved by DBS with subsequent installations
based on customer feedback.
♦ User Materials – At the time of the initial site visit, limited resources were available to guide users in
using the product. While the product is rather intuitive for someone already experienced in using
Windows -based products, for a computer neophyte this is a serious learning challenge. Fortunately,
now DBS offers a useful training manual and they have also revised the language of the online help
menu. Even with these resources, given the sophistication of this product an MFI should not cut
corners on training. To get the most from a system as cost effectively as possible, users must be
sufficiently trained and feel confident using the system.
♦ Training – MFI managers should communicate their training needs and participants’ competencies to
DBS’ trainers as part of the purchasing negotiations to ensure that the best possible training is
provided. Given the complexity and depth of this product, at least one week of training should be
planned and budgeted for front-office users, and two to four weeks by back-office (e.g. accounting)
and information technology (IT) staff. Also, it would be prudent to budget an additional few days for
DBS trainers to remain on-site for answering questions immediately following the training period,
presuming the data conversion will be commenced at that time. This may prove cost-effective in
avoiding data entry errors and speed the conversion process.
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Reporting
The rating of the eMerge product’s reporting capabilities is based on three areas: 1) the extent to which
built-in reports can modified or new reports created, and the data exported, 2) the accuracy of the
information presented, and 3) the visual layout and effectiveness of the reports.
Reports, Report Generation and Exporting
Setting up, generating and printing reports is quite easy in eMerge. This is done through a series of
choices in a drop-down menu from the top of the screen. The standard reports provided cover much of
the information requested in the suggested CGAP reporting guidelines, but not in the exact same format.
The eMerge product provides the standard reports indicated in the following tables.
Management Reports Operational Reports

Key Statistical Summaries X Daily Listings X
Cash-Flow Projections Daily Delinquency X
Branch Office & Loan Officer Performance X Portfolio Quality X
Financial Reports Customer Reports
Trial Balance X Statements X
Daily Sub-Ledger X Balances X
Daily Transaction X Queries X
Monthly, Quarterly, & Annual Financial X EOY Interest X
Statements
Ratios and Trends X System Reports
Accounts Inflation & Subsidy Adjustments X Calculations of Ratios and Indicators X
Audit Trail X
Any reports not included with eMerge can be requested from DBS upon delivery of the system or
configured later with technical assistance. The standard reports are all very easy to generate with a few
clicks, given the proper user-determined authority. The MFI we visited was quite satisfied with the
accuracy, ease of use, and format of eMerge’s built-in reports, and in fact considered this as one of
eMerge’s best features. Report functions are flexible and can be user determined to track by branch,
loan officer, product, etc., or in consolidated form. Reports can be run as often as every day, as the
system is updated with end-of-day processing. These can be viewed on-screen, and printed on any
paper desired. In addition, report data can be exported into Microsoft Excel for further analysis or
customization. The MFI we visited was not using this feature, so we could not confirm its user-
friendliness. There is also a report writing facility that we were unable to test for user-defined report
headings, columns and rows that will source information into standard general ledger reports. Report
formats are logical, and can be reconfigured by DBS to a specific format requested by the customer (e.g.
CGAP standards). eMerge also automatically creates an audit trail report linking a user to each
transaction.
♦ Reports – The MFI we visited had to request assistance in creating a new report listing complete
account information for a given client on a single report. A new customer should specifically request
this report, if it has not already been added to the system.
♦ Exporting – The data in reports can be saved and exported to other applications, such as MS Excel,
for manipulation or presentation of the information, but it is not known what the process requires. If
this is a major requirement of an MFI, it should request to be shown the importation of needed
information as part of the live demonstration.
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Financial Standards and Compliance
The rating of the eMerge product for financial standards and compliance is based on two areas: 1)
generation of reports that follow Generally Accepted Accounting Principles (GAAP) or International
Accounting Standards (IAS); 2) the ability of the software to provide accurate information for regulatory
requirements of local, regional or national supervisory organizations.
1) Accounting Standards and Soundness
While the eMerge product has not been certified, nor even reviewed by any international body,
government authority or third party agency to-date, the DBS states that the accounting module complies
with international accounting standards. The accounting module has been successfully installed in
several institutions but does not handle the French accounting format at this time. The standard reports
generated by the software include the information specified by CGAP’s reporting guidelines, although not
in the exact same format. The eMerge software has been looked at and used by several accountants
involved with the MFI visited, and all have found the software to follow sound accounting methods. As of
the time of the site visit, calculations by the software appeared to be correct.
2) Government and Supervisory Adherence
According to DBS there has not been any issue with the product not being able to track or produce
information necessary for meeting regulations in the countries where it is installed. The MFI visited for
this review confirmed that it enabled them to meet all their regulatory requirements. Depending on the
complexity of the special reporting, potentially built-in reports could be added to meet requirements on a
country-by-country basis. To-date the eMerge product has not been integrated into any national payment
system, but given its open development structure it could be customized to interface (send and receive
data files) with such a system. Since the MFI visited was not taking advantage of this functionality, it is
unknown how difficult such a customization would be.
♦ Cash to Accrual – If switching from cash to accrual accounting, an MFI should strongly consider
scheduling the conversion from the old system to eMerge in accordance with its fiscal year to simplify
reconciliation and ensure accuracy of reports.
♦ Auditor Review – While there are no apparent problems with the accounting features of this product,
as a proactive step before purchasing the software it is generally advised that a MFI have their
external auditors review the application, and the reports generated by it, for approval.
♦ Regulatory Requirements – Depending on a country’s regulatory requirements or banking system,
the eMerge product may not be sufficient as is, and would require customization before installing.
Customization can be costly, so it is important for a manager to determine ahead of time what if any
customization may be needed as part of the software selection due diligence process.
echange, llc 12
System Administration and Technical Support
The rating of the eMerge product for system administration and technical support is based on six
categories: 1) security, 2) fault tolerance and robustness, 3) technical support and maintenance, 4)
installation and conversion, 5) version control and upgrade strategies, 6) backup and recovery. Heavy
emphasis is placed on technical support services in rating this area.
1) Security
eMerge security features are quite good without compromising its flexibility. Security in eMerge is defined
by different levels of access with each user being given their own login name and password. The
different security levels are defined by job and necessary data access. For example the head teller has
the authority to run the end-of-day processing, but a regular teller does not. The menu options are still
displayed on the screen, but are not active if the user doesn’t have the appropriate access. Getting
around the security would require users sharing passwords or collusion. Passwords are set by the
system administrator and can be controlled either by eMerge or Windows NT. The system administrator
is able to set conditions for users and they can be prompted to change their password at each log-on. In
addition, there is an option for time-of-day log on, to restrict certain users to hours when they be
supervised. Windows NT can also restrict users from logging on to selected workstations. eMerge
checks the user log-on to match the NT system logon. The password list is encrypted and cannot be
viewed at anytime. The database is not encrypted, however, to maintain the flexibility necessary to run
on the Universe/Jbase platform. This also then allows reports to be viewed at anytime. The system
includes an automatic audit trail report.
eMerge now includes a feature to automatically provide notification of file violations and generates a
system violation log. However, the MFI visited did not have this feature in place at the time of the visit, so
the quality of the functionality could not be confirmed. No firewall currently exists in the product; although
DBS reports that a firewall system is currently under development. The only other data protection is that
the source code resides on the server, which means that it cannot be copied, used, modified, or deleted.
2) Fault Tolerance and Robustness
Given that the eMErge product was developed from a tried-and-true banking software package and is
designed best to work with 50 concurrent users or more, it is presumed that the fault tolerance is quite
high. However, the MFI visited for the review had less than 5 users on the system at a time and only a
small amount of data in the new database, so they were unable to comment on the performance of the
system under these extreme conditions. The MFI visited was at the end of their data conversion process
and had yet to go live with the new software, but to-date they had not had any problems and found the
software to be very stable. Furthermore, the MFI’s system administrator, a senior level technologist who
had been working for nearly nine months with the software, thought the system to be quite robust. In the
event that the network or the software application should crash, it is unclear how much notice might be
provided to the user and what data in process could be retrieved. It is presumed that any transaction
completed would be retrieved. The data recovery will also be dependent on the network system being
used.
3) Technical Support and Maintenance
Without a reasonable amount of support and training, even the most feature-laden, least expensive
software system can be an unsatisfactory choice. The market for dedicated MIS software for
microfinance institutions is growing, but is still extremely limited relative to other software applications.
Many firms offering such products aspire to market them globally in order to install enough systems to
recoup costs and turn a profit. This presents a significant challenge to adequately support customers
echange, llc 13
who are often in another country in a cost-effective way. The same DBS personnel who are responsible
for the conversion, implementation and training of the software also form part of the technical support
team. The MFI visited for this review received their technical support from DBS directly, and felt that the
support, both by phone and site visits was helpful and timely. DBS deploys and supports eMerge though
a network of partner Value Added Resellers (VAR), appointed by DBS in partnership with Temenos,
which controls the source code for eMerge’s core Globus system. These Resellers act as representatives
for DBS, and are responsible for sales, marketing, customer service, training, installation, and technical
support. VARs also act as the liaison for local eMerge user groups, where they exist. Response time for
requests for technical support would depend on the proximity of the nearest agent and the nature of the
request. The most technical issues would need to be referred to programming personnel at the parent
Global Technology in the United Kingdom, as DBS does not have access to source code for eMerge.
DBS currently has certified representative agents in Belgium, Ecuador, Germany, Ghana, Greece, Hong
Kong, India, Ireland, Korea, Luxembourg, Malaysia, the Middle East, Nigeria, the Philippines, Portugal,
Russia, Singapore, South Africa, Switzerland, Thailand, United Kingdom, and the United States. The
quality of service of these Resellers is unknown, or whether they are even familiar with the new eMerge
product or only the core Globus system. Although DBS plans to form an online user’s group, it does not
exist to date.
4) Installation and Conversion
The conversion process reported by the MFI visited (a beta site, and DBS’ first installation of eMerge)
took several months longer than was originally planned, due to both client and vendor issues. According
to DBS, installation should take about four weeks, and the data conversion time depends on the amount
of data the institutions has and its current form. During this time, it is critical that enough staff resources
be dedicated to run the old MIS in parallel with eMerge, while the data is converted and staff gain
confidence in using the new system. Electronic and manual migration of the data from the old system to
the eMerge software is possible, depending on the volume of data and the existing form of the data. As
part of the follow-up for installation, a few months later DBS technicians will spend several days working
on any problems that may have occurred after some initial use. The MFI should make sure to include in
the budget the cost of this site visit and training in addition to the base price of the software.
eMerge is a more technically challenging product than most others reviewed in this series of reports. The
management of the MFI visited strongly suggested, and we concur, that an MFI should have an in-house
person with Information Technology (IT) and networking competencies during the several months of the
set-up and data conversion stages. It would be difficult and expensive to set up eMerge without such a
person, otherwise a DBS technician would have to fulfill this role. Alternatively, a third party consultant
with ready availability at short notice could help resolve the inevitable numerous small issues that come
up. After the system is well established and users are familiar with eMerge, it may be no longer
necessary to have this person on a full time basis, as the system would be expected to be quite stable
and fault-free at this point. This should be budgeted into the costs of the eMerge package.
5) Version Control and Upgrade Strategy
Modifications in future releases of eMerge may come from requests from user groups who meet
periodically. The latest version is Release 1.0; the next release will be six months to one year from now.
eMerge users and industry experts participate in a process of defining features for future releases based
on best practices and innovations of the industry. At least once per year DBS will provide a new release
to all clients. The upgrade is free as part of the maintenance agreement. The releases will be sequential
and therefore the client will need to perform each update. It should be noted that there are several older,
DOS-based applications with the same name. These are simple non-integrated loan tracking applications
that bear little resemblance to the Windows -based eMerge version 3 reviewed here.
echange, llc 14
6) Backup and Recovery Strategies
eMerge has easy backup and recovery features. A backup script is automatically run before and after the
end-of-day processing. If anything should go wrong during the end-of-day processing a normal restore
can be implemented. The system administrator typically keeps a backup of the network system for 5
days on the server after which it is “recycled”. In addition, a full backup of the database onto tape or CD
can (and should) be made and then stored offsite to protect from theft, fire or other catastrophe. The
length of time a backup takes is entirely dependent on the size of the database and hardware. A blank
database is about 200MB and the time taken for a backup is totally dependent on the hardware
configuration, and number of client terminals. It can range from 10 minutes to a few hours. The recovery
process takes the same amount of time and effort as normal backups.
The software keeps track of the current status and activity of central processing and each user at the
server. When capturing data and the system freezes or crashes, data will have to be re-entered unless it
was saved at a particular point of capturing. DBS is currently developing archival facilities for off-loading
old, unused data.
♦ Local Technical Support – DBS’ local reseller partners have worked with the core Globus product
only and have no history of supporting the eMerge product. Furthermore, the MFI visited reported
having no in-country Reseller so it was not possible to judge the quality of this technical assistance of
the network. Instead, installation, training, and support were provided directly from DBS in South
Africa. While it is possible that training and technical competencies are as good or better than those
of DBS itself, a prospective customer should make some effort to evaluate the local representatives
before making a decision to use eMerge.
♦ Data Conversion – Typically the most challenging aspect of installing a new information system is
the conversion of the old data to the new system and being able to reconcile the information. An
institution should run its old MIS in parallel with eMerge for several months to ensure a smooth
transition and prevent the loss of data from user errors. An ideal time to implement any new MIS
system is the beginning of the institution’s fiscal year. In this way, end of year reports and audits can
be run on one system, reducing the inevitable problems of reconciliation of data between the old and
new systems. Due to eMerge’s many features, including tracking of non-financial client information,
collateral tracking and similar, complete optimization of the software may take longer than some
simpler packages. Also, the MFI should consider creating a mini database file separate from the
actual data files for testing and training.
♦ Installation – Installation can often go longer than planned due to unforeseen problems. Since the
same DBS staff typically conducts the installation and the training, management should consider
negotiate a contingency plan as part of the software license to ensure additional installation time does
not consume designated training time.
echange, llc 15
Technical Specifications
The rating of the eMerge product’s technical specifications is based on three categories: 1) technology
and architecture, which includes performance, 2) research and development, 3) date and number
handling.
1) Technology and Architecture
eMerge’s, like the GLOBUS software from which it was built, operates with the UniVerse database from
Ardent Software. The UniVerse database product incorporates many features to improve processing
speed, as well as flexibility in data structures. UniVerse is a SQL and ODBC compliant database. These
two industry standards mean that data from a UniVerse database, and therefore eMerge, can be
extracted or merged with any industry ODBC standard database environment, such as Oracle and
Sybase, then viewed on a wide variety of client applications such as Excel and other Windows DDE/OLE
compliant software. The UniVerse database product also includes a special programming language, UV
(UniVerse) Basic, as well as a reporting tool, Retrieve, and various other database administration
facilities.
eMerge is designed to run over a local area network (LAN) , a wide area net work (WAN) or a client/server
network. Specifically, it operates on Windows NT, or Windows 2000 Server platform, using standard
TCP/IP Ethernet Networking Protocol. It can also run on a stand-alone PC. The minimum and optimal
hardware requirements for a server or any computer running the software are at least 64 megs of RAM,
10 GB of hard drive space, and a network interface card (3com or Intel brands are suggested by DBS).
DBS technicians tested hardware acceptability based on these standards during this installation. The MFI
visited installed eMerge using a Windows NT platform, with nine client terminals, each running on
Windows 98; most with 128 MB of RAM. A few of the client terminals run on only 64 MB of RAM; while
performance is satisfactory with less RAM, such as 32 MB, there is a noticeable difference in response
time, particularly when running Excel and Microsoft Word concurrently.
According to DBS, the software should support an unlimited volume of records, the limiting factor being
capacity of the hardware. DBS did not supply more specific information, and the MFI visited had a
relatively small amount of data inputted, well within eMerge’s capabilities so the expansion issue could
not be verified. Speed and performance of the system in report generation, list generation, and data
searches were reported as quite satisfactory but performance is unknown for an installation with a large
amount of data. The empty database requires approximately 200 MB of storage; at least 2 GB of storage
capacity are recommended by DBS for most institutions
Depending on an organization’s specifications for their overall system, additional external infrastructure
may be necessary, such as a client server network, zip drives and disks, Internet access, dial-up or
leased communication lines for branch connectivity or FTP (file transfer protocol) for vendor support
access.
2) Research and Development
The eMerge product has been around since 1996, first in a DOS version, then as a progress database
based on the Solace retail banking system which was eventually redesigned into the current eMerge
application. The product was initially developed, and continues to be improved, to support the many
smaller financial institutions that have not had access to quality banking technology. The evolution to the
current eMerge software came about as a need to provide a system based on mature technology that
could be supported worldwide with global partners and an existing distribution network. Changes to the
software will be driven by market demand and updated on an annual basis. According to DBS, user
groups worldwide will participate in the development process, although these do not yet exist. No
echange, llc 16
enhancements are currently planned that will affect the base system. In the future, DBS plans to do beta
testing “in house”, with the assistance of Global Technologies to provide system checking and quality
control, as well as through selected local VAR partners.
3) Number and Date Handling
eMerge can manage up to fifteen digits in currency calculation and accounting, plus one character to
indicate currency type. Numbers greater than fifteen digits will need to be rounded, which may be an
issue in countries with high inflation and currencies with many digits. While this may be acceptable for the
accounting module and for reporting purposes, (e.g. reporting to the nearest thousand units) the problem
is more acute in the portfolio module tracking, where an individual client’s account needs to be completely
accurate without rounding.
According to DBS, eMerge is Y2K (Year 2000) compliant in relation to the licensed Software, meaning
that its performance and functionality is not affected by dates before, during and after the Year 2000. No
problems of this sort were reported by the MFI we visited.
♦ Product Design – Given that the core component of the software is defined by a previous product
designed for the banking industry, which is much more standardized than the microfinance sector,
certain types of changes may be more difficult to incorporate. Thus, the MFI may need to be more
flexible in aligning its processes and procedures with the software.
♦ Product Development – DBS is the marketing side of the company, while Temenos and Global
Technology (Glotech) are the software development side of the partnership. DBS is therefore reliant
on Temenos and Global Technology to resolve any product issues, which may or may not translate
into a delayed response time between customer requests for modifications or major fixes and DBS’
ability to respond.
♦ Number Rounding – For most MFIs 15 digits for numbers is more than sufficient. If an MFI sees
rounding as a potential problem for clients with the very small loan and saving amounts, they should
discuss possible customization with the developer.
echange, llc 17
Company Profile
th
DBS Consult Pty Ltd 12 floor, 1Thibault Square,
www.dbs.co.za Cnr Hans Strydom & Long Street,
www.temenos.com Cape Town
www.glotec.co.za South Africa
A wholly owned subsidiary of
Global Technology – SA, and Temenos NV Mailing Address:
PO Box 7623, Roggebaai, 8012, RSA
Email contact:
info@dbs.co.za Tel: +27 21 425 1212
Fax: +27 21 421 5845
Company Type Location of Technical Assitance (TA) Offices

Wholly owned subsidiary of a listed company. South Africa & 18 other countries (Temenos)
Core Business Number of Employees/Number of TA Staff
DBS - Marketing and Distribution Unknown, currently less than 15 at DBS (not
Glotec & Temenos – Software Develoment including large partners)
Glotec – 700
Temenos - 800
Time in Business Medium of TA available
DBS - 5 years Email, phone, and site visits
Glotec & Temenos – 10 years
Client Profile Training
Microfinance organizations of all sizes Provided by DBS at an additional cost.
Client Base TA Staff Experience
Approximately 100 clients, all of whom are Staff come from a diverse array of Credit
using an older, quite different DOS based Union management and technical areas, to
product with the same name development staff, plus sales and marketing
Globus – more than 300 clients backgrounds.
Active Number of Clients Number of Software Implementations/Month
5 on Temenos eMerge 20 planned for OI next 18 months
30 planned for DID
Location of Clients Users Group

Africa (for eMerge version reviewed here) None currently exists, planned for the future.
other clients for older product around the
globe.
Decentralized Banking Solutions (DBS) is the micro-banking subsidiary of Global Technology South
Africa. DBS has been providing banking software for niche players in emerging markets since 1996.
DBS is a company whose purpose is to deliver products and services to under-served small banks,
microfinance institutions and financial co-operatives, exclusively in "emerging" financial markets. DBS
targets small, medium and micro financial service providers in the emerging markets of the developing
and former socialist states. DBS specializes in development, distribution, and support of information
technology to small and mid-range financial institutions in emerging markets who range from those
involved in product development to distribution assistance to technical support.
Temenos and Global Technology jointly hold DBS. Global Technology (Glotec), a South African listed
company has been in business for over 10 years. Glotec and DBS are part of the TEMENOS Group with
18 international offices, operations, and business partners worldwide. In addition, as part of its strategy to
address the needs of microfinance institutions and to support World Bank programs throughout the
echange, llc 18
developing world, the IFC has recently become a principal investor, and substantial share-holder in DBS.
More detailed information about the company can be found on the Internet at www.glotec.co.za and
www.temenos.com.
DBS has a customer base of approximately 100 clients, almost all of who have assets of less than US$1
million. As of the date of this report, these customers were all using older, DOS-based versions of
eMerge that was limited to accounting functions. The latest release of Temenos eMerge reviewed here
was funded by this corporate structure, and reflects a significant change in technology from older
versions.
Summary of Costs
The initial base price in US dollars for the software license is:
$5,832 and $23,085 per user for 5-concurrent users
$3,900and $10,500 per user for 15-concurrent users
$2400 and $6 000 per user for a 50 user system
Volume purchases can be negotiated.
The software licensing fees are based on the level of functionality required as well as the volume of users
(the pricing model has a steep volume-based discount curve). Managers should estimate the number of
users that will be logged on to the system at the same time in order to calculate the number of licenses
necessary to purchase.
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The software license fee includes the database as well as the software, and there is no necessary third
party software required.
Training Fees
Training and implementation costs are additional. End-user training courses are two weeks in duration,
and system administrator training lasts three weeks. The training costs would vary from territory to
territory, but an average cost per user could be calculated at $200 per user, per day. Training can be
arranged on-site, or at DBS facilities in South Africa.
Consulting Services
The system implementation takes two to three weeks, depending on the amount of conversion required.
Implementation costs vary, but an average cost per day can be estimated to be around $450 per day,
plus expenses for travel, etc. In addition to this a Project Manager may be recommended at an
approximate cost of $550 per day. This depends on the level of in-house IT experience. Other hidden
costs that need to be considered include the cost of staff time involved for initial data entry, which may
vary from a simple electronic data conversion into eMerge from the old MIS to a manual re-entry of client
and historic data.
Maintenance Contract
The annual maintenance fee is set at 20% of the license fee, payable in advance. The maintenance fee
includes free upgrades to new releases estimated to come at six-month intervals. Note that upgrades are
sequential; all previous upgrades must be loaded before the newest is added.
echange, llc 19

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BUILDING FINANCIAL SYSTEMS FOR THE POOR

CGAP Information Systems Consumer Report

About the Consumer Reports

The Application Selection Criteria

1. Commercially available off-the shelf application.

The Review Process

The Report Rating Scale

Poor Okay Best

Evaluation Dates: September 2000 – February 2001

Evaluation Author: Joseph Kotun, echange, llc

Product: Historical Products

CGAP Consumer Report Rating

Functionality and Scalability

System Administration & Technical Support

Functionality and Scalability

1) Functional completeness, appropriateness, and integration

Loan Portfolio Management

Client Relationship (Information) Management

Individual Personal Individual Business Group Information

2) Expandability and Institutional Growth

Institutional Types Lending Methodologies

Loan Product Types Loan Interest Calculations

Payment Types Payment Methods

Payment Frequencies Payment Year Supported

Special Payment Modifications Additional Types of Payments

Multiple Branch or Regional Offices

1) User Interface & User-Friendliness

3) User Training and Support

Reports, Report Generation and Exporting

Management Reports Operational Reports

Financial Standards and Compliance

1) Accounting Standards and Soundness

2) Government and Supervisory Adherence

System Administration and Technical Support

2) Fault Tolerance and Robustness

3) Technical Support and Maintenance

4) Installation and Conversion

5) Version Control and Upgrade Strategy

6) Backup and Recovery Strategies

1) Technology and Architecture

2) Research and Development

3) Number and Date Handling

Company Type Location of Technical Assitance (TA) Offices

Location of Clients Users Group

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