Signposts to the provision of market-led microfinance services

This paper lists the following signposts to the provision of market-led microfinancial services that reflect MicroSave’s experience with its Action Research Partners:

Vision and mission statements: They focus on profitability by designing, developing and delivering quality customer responsive financial services. A competent board that prevents mission drift and supports a customer-focused agenda. The executive function: Focus on the customers; Ensure balance between the functions of marketing and operations; Hire and develop competent senior management; Plan the future; Be aware of the competition. Development and retaining of customer-focused staff by investing in: Training on delivering client focused services; Effective internal communication; Building staff capacity; Staff incentive schemes. Retaining customer-focus in the front-office operations through: A marketing department that maintains a customer-focus in all activities; A research department that looks into customer requirements; A strong brand; A feedback loop that welcomes suggestions from customers; A pleasant banking environment; Branch managers, who are knowledgeable about their local community. Support from back office operations in continually improving products and processes by: Pilot testing major changes; Actively managing risk; An information technology (IT) department that develops customer-friendly IT solutions; An internal audit aimed at ensuring efficient service delivery and customer satisfaction.

The paper concludes that a market-led transformation is beneficial to a financial institution in terms of increasing profitability and outreach. However, the institution needs to use great skill to take care of the resulting growth.