To understand and assess the business of mobile banking more clearly and in more detail, this Note uses a business model framework and some of the concepts co-created by an active and vibrant community of practitioners in an online community called the “business model innovation hub”. The business model revolves around 9 building blocks, described by Osterwald et al. These are:
1. Customer Segments: An organisation serves one or several customer segments
2. Value Propositions: It seeks to solve customer problems and satisfy needs
3. Channels: Value propositions delivered to customers through communication, distribution and sales channels
4. Customer Relationships: Are established and maintained with each customer segments
5. Revenue Streams: Result from value prepositions successfully offered to clients
6. Key Resources: Assets required to offer and deliver the previously described elements
7. Key Activities: By performing a number of key activities
8. Key Partnerships: Some activities are outsourced and some
9. Cost Structure: The business model elements result in the cost structure
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The Collection Methodologies in Group Lending
Instalment collection extends for the entire duration of loan cycle (which is usually a year) and occurs at regular frequency (usually every week). This makes collections the single most critical driver of costs. This Note describes and compares the three most commonly practiced instalment collection methods in group lending. It then highlights that MFIs now have the opportunity to partner with banks as their banking correspondents (BC) and that this provides unprecedented opportunities to make instalment collection more efficient and client-responsive.
However, in conclusion it notes that whichever collection mechanism is used, MFIs will have to devise ways to ensure continuity in their interface with clients. Banking is based on trust and thus technology can never replace the person-to-person contact.
Process Mapping for Mobile Banking Initiatives
This Note focuses on the intricacies involved in conducting a process mapping exercise for mobile banking initiatives. It analyses the key steps and activities necessary to prepare for effective process mapping; essentials on which to focus during the process mapping exercise; and the maintenance activities to be expected after initial process mapping has been completed.
Adopting a systematic approach to design processes in a mobile banking initiative is crucial to avoid redundancies and to create processes that are robust. Alignment of interest between business partners goes a long way in securing the success of any such initiative.
When You Can’t Save Up – Saving Down and Saving Through
“This Note discusses how low-income households move financial value through time using loans and chit funds in order to access large sums of money. It uses Stuart Rutherford’s framework of saving up (typical savings behaviour); saving down (taking a loan and repaying in small instalments); and saving through (insurance and group-based savings systems like chit funds or ROSCAs).
Low-income households often rely on saving down and saving through to move financial value through time. Poor households use informal sector variants of saving down and saving through – at greater risk and cost. This presents an opportunity for financial service providers, as there is a large unmet demand and room for product innovation. The pattern of usage of these avenues also offers notable insights for developing savings products for poor households.”
Review of MMT Payments to Accredited Social Health Activists (ASHAs) in Sheikhpura, Bihar
An ASHA or Accredited Social Health Activist is a trained community health worker reaching out to mothers and newborns in rural India with home-based Post Natal Care and other health services under the National Rural Health Mission. These ASHAs are entitled to performance based incentives for the services they provide. However, the ASHAs generally face problems such as untimely payments, uncertainty in disbursement date, cheque clearance delay, and long waiting time at the bank branch. The Norway India Partnership Initiative (UNOPS-NIPI Programs) has initiated a pilot project to improve the timeliness of payments to ASHA worker’s incentives in Sheikhpura district of Bihar using a mobile money transfer (MMT) system. The project is steered by State Health Society Bihar (SHSB), with technical support from Eko Aspire Foundation (the Business Correspondent) and State Bank of India (SBI) and with funding and support from UNOPS-NIPI Programs. The case study summarises the impact of the cash transfer programme on the key stakeholders i.e. ASHA workers and government administration and draws comparison between pre-MMT and post-MMT scenario. The programme has resulted in timely payments to ASHAs and hence improved performance by them. It also has lead to increased efficiency of the staff at block level primary health centres and improved monitoring of the ASHAs.
A Closer Look at Multiple Borrowing in the Philippines
With increasing cases of over-indebtedness among microfinance clients, multiple borrowing is getting its share of unfavourable limelight. Multiple borrowing brings many benefits to clients, but too much can also bring problems. In this Note, we present summary results of a study which looked at this phenomenon in the Philippines.
The study aimed to contribute to the body of knowledge to better understand multiple borrowing and its link to over-indebtedness. It concludes that MFIs and the microfinance industry can look to multiple borrowing as an early warning sign of the need to improve products and services to better meet and serve the needs of the low income market. MFIs would do well to heed the warning.