This IFN expands on the cost of cash research, and presents the key findings from the study undertaken and provides insights on how an organisation may apply the tool’s findings in an e- or m-banking scenario. Understanding customer pain points and what value can be created by offering a new, improved one is important for mobile money stakeholders to deliver the right services to the right customers at the right price. The research tool used to assess these is described in more detail in IFN 51 “Understanding the ‘Cost of Cash’ for Low Income Clients: Why and How?”
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SPM Case Study: Nirantara – Building a Sustainable Social Enterprise
MicroSave conducted a Social Performance Management (SPM) exercise with Nirantara to help the organisation better align its operations and strategy with its social mission. The focus was on client needs and preferences. Nirantara Community Services (Nirantara) was founded in 2006 as a Society, with a vision to provide need-based and cost-effective financial services to underserved women. It presently manages a portfolio of Rs.55 million and works in peri-urban and urban areas of three districts of Karnataka (Bidar, Gulbarga and Bijapur).
MicroSave’s SPM Interventions were focussed on the :
Holistic strategy to address client needs. Provision of non-financial services such as education along with microfinance, accordingly.
Credit Risk management through clearer client- profiling
Analysis of social indicators in MIS
Performance development of staff through incentives and training
The intervention led to significant improvement in staff productivity, client dealings through functional literacy programmes, and focus on social orientation through provision of non financial services such as pre school education.
SPM Case Study: Sambandh – Building Client Relationships
Sambandh’s mission statement: “To economically empower low income households by providing a broad range of client focused and responsive financial services on a continuous basis.”
MicroSave recently conducted an SPM assessment on Sambandh which brought out the strengths and weaknesses of the organisation and the areas for improvement. Sambandh is an MFI operating in Northern Orissa, predominantly in the urban areas of Sundargarh District. It functions as an urban financial services initiative for low income households with a long-term view of improving the quality of life of the poor. Its objective is to support micro-entrepreneurs in developing and expanding their businesses.
The SPM exercise focused on:
Strong systems and procedures reflecting strong institutional culture
Motivated staff and healthy organisational climate as borne out by robust formal/informal communication system
Initiative to strengthen the Helpline system through requisite training of staff
Induction training focussing on role plays, punctuality and etiquette
Performance appraisal as per the organisation’s mission and values
Viable product mix
The SPM diagnostic led to improvement in process optimisation, credit risk management, incorporating social indicators and strengthening support services like Helpline facility.
SPM Case Study: Asirvad – The Balance of Social Aspirations and Financial Realities
In April 2010, Asirvad and Lok brought in MicroSave to undertake a comprehensive social performance management (SPM) diagnostic and action-planning exercise to gain a competitive edge in the fiercely competitive rural lending environment in the South. Asirvad Microfinance Private Ltd. (Asirvad) is an NBFC-MFI operating in 14 districts of the South Indian state of Tamil Nadu. In 2009, Lok Capital (Lok), a social venture fund, became a partner to Asirvad by subscribing to 24% equity.
The SPM diagnostic focussed on the following areas:
Overlap between social and financial performance and mutual reinforcement for better achievement of organisational goals
Synergies between partners through participatory planning/strategising exercises
Focus areas over a definite time-frame
Process improvement
Human Resource Development
Value addition to existing services
SPM intervention led to improvements in product design, client protection, staff incentives, transparency, professional quality services, and sustainability with a goal of increasing outreach to the unbanked.
Understanding the ‘Cost of Cash’ for Low Income Clients: Why and How?
Identifying the right Customer Value Proposition (CVP) is essential for the large scale adoption of m-banking or mobile money services. MicroSave developed a “cost of cash” tool specifically around for understanding the pain involved in cash transactions (with an eye towards presenting an m-banking solution to alleviate the pain), which helps e/m-banking stakeholders to discover which suite of transactions to focus on. The initial research results helped mChek in India to refine its overall un/under-banked strategy and in developing new service offerings for its partners and end-clients. These are described in more detail in IFN 52 “Removing the Pain from Using Cash: An M-banking Solution?”
Characteristics of Mumbai Microfinance Market
The Mumbai market is unique and needs to be approached in a different way by MFIs. Since Mumbai is a busy place, MFIs need to make their operations efficient and faster: weekly group meetings are likely to be unpopular. This Note analyses the way poor entrepreneurs in Mumbai currently finance their businesses, and the options and opportunities for MFIs in Mumbai. It then provides some pointers on how best to design products for this unique urban market, and concludes that with care, and thoughtful product design, Mumbai promises to be a very lucrative market for microfinance.