Databases

Case Study: Using Web Technology to Enhance Core Operations

Background

Root Capital is a nonprofit social investment fund that is pioneering finance for grassroots businesses in rural areas of developing countries. They provide capital, financial education, and market connections to small and growing businesses that build sustainable livelihoods and transform rural communities in poor, environmentally vulnerable places. Root Capital has been widely recognized for their work and has received awards from Fast Company, the Monitor Group, Ashoka, and the Social Venture Network. Backers include the Bill and Melinda Gates Foundation, the Rockefeller Foundation, and Starbucks.

While headquartered in the United States, Root Capital conducts much of its operations in field offices in Costa Rica, Mexico, Peru, and Kenya. By offering loans and financial training to small and growing businesses in rural areas of the developing world, Root Capital aims to fill the "missing middle" of finance- serving organizations caught in the gap between microfinance and traditional banking. Root Capital's support enables borrowers to take advantage of good business opportunities and rising demand for their products by providing loans and technical assistance needed to grow operations, invest in infrastructure, or manage cashless periods before harvest time.

Organized Loan Management

Root Capital has a unique loan management process with atypical business rules for lending and loan payments that is based on contracts between borrowers, their customers, and funders. Loans range in size from $25,000 to $1 million and support the production of coffee, cocoa, nuts, essential oils, and other natural products.

Before working with Isovera, Root Capital stored its loan information, including the distribution of funds, repayment information, and contracts, in hundreds of Excel spreadsheet files. As the organization was quickly growing, it recognized this system was unsustainable. A true database system was needed in order to support the organization’s future growth. 

Eliciting Requirements & Defining a Plan

Isovera first began working with Root Capital to elicit requirements from stakeholders who would be using the system in various ways. These requirements were compiled, vetted, documented, and prioritized into a development plan to implement a web-based Loan Management System under an agile development methodology. Given the broad scope of overall requirements and the need for tangible benefits in the short run, a number of system release iterations were planned. The task was to implement a usable system in the short run that could be extended to provide broader support to the organization in future iterations.

Productivity Platform to Support Growth

The Loan Management System is now accessible online from anywhere in the world to Root Capital employees who are able to create/update loan schedules, and to borrowers and funders who have access to view their loan information and account statements. The system automatically calculates payments for principal, fees, and interest based on logic that incorporates interest rates, current fee structures, customer history, and conditions specific to the contract between the borrower and the funder.

Root Capital’s management is able to obtain real-time business intelligence information and reports across its entire global loan portfolio. The system provides a solid foundation that enables the organization to grow at a more rapid rate while increasing operational productivity and overall quality.