This note discusses the role of branches as a marketing point for identifying prospective customers, determining their needs and matching products/services to these needs. It also details out the benefits of branch based marketing which extends to increased profits, enhanced efficiency, increased responsiveness, more customised services, and refined monitoring. It provides lessons from Kenya and Uganda on successful branch based marketing. It chalks out steps for establishing branch based marketing—training, action planning, implementation, monitoring and review. The note finally cautioned about customer centric products and services designed and delivered in an efficient and customer friendly manner to fully leverage the potential of branch based marketing.
Blog
Loan Portfolio Assessment in Practice
This note talks about the significance of loan portfolio audit as an essential feedback to the stakeholders in order to understand the risks in the MFI’s loan portfolio and the systems/procedures used to mitigate this risk. It explains in details the process for conducting loan portfolio audit which includes sample selection, verification of loan management processes and documentation to check for consistency and completeness, and looking at portfolio management policies, systems and procedures in relation to international best practices. The note also brings forth the issues arising out of a loan portfolio audit like non existence clients, mismatches in records, rescheduling and practices without management’s approval.
Human Resource Management for Growing MFIs
This note provides examples of human resource issues to consider during growth phase of microfinance institutions. Primarily it focuses on developing clear cut organisational structure, new communication channels, recruitment and hiring needs, training and staff development, performance management and development of the institutional culture. It also reminds that understanding and managing the MFI’s institutional culture and keeping the mission and values front and centre is crucial for a growing MFI. It concludes that by building strong, well functioning human resource systems and tools, an MFI would be well poised to meet the demands of growth, manage the challenges of an evolving environment, and respond to the needs of clients.
Issues in Mobile Banking 2: Regulatory and Technical Issues
This note sheds some lights on the issues related to regulation requirements or in some cases lack of understanding/interest of the central banks, in implementing mobile banking by financial institutions. It highlights the significance of access to payment systems, which is a key barrier in many countries. Then the anti money laundering norms, which require face to face interaction with the account holder, in many countries is a challenge faced by service providers. Furthermore, regulation may be a factor in the services that can be offered by an agent and the ability to manage operational and reputational risks, which this note points at, succinctly. The note also reviews the system requirements, which would be dependent on regulatory environment, functionality, availability of secure infrastructure & handsets, sophistication and lastly but importantly the customer affordability.
Lessons From The Grameen II Revolution
Grameen took 27 years to reach 2.5 million members – and then doubled that in the full establishment of Grameen II. Even in Bangladesh’s fiercely competitive environment Grameen continues to grow at a remarkable rate attracting around 140,000 new members each month – a staggering 1.7 million new members every year. In the three years to December 2005, Grameen’s deposit base tripled and its loans outstanding doubled. In the same period the bank has introduced a more conservative provisioning policy and built up a formidable loan provision for its troubled housing loan portfolio. At the same time the quality of the loan portfolio has significantly improved, as did profitability. Drop-outs are returning, and even some old defaulters are repaying and re-joining. Market-led Grameen II is yielding very encouraging results. Grameen customers are using the Grameen II products in a wide variety of ways, to meet the diversity of needs and challenges that face them. This note describes the effects of the new Grameen II efforts on the overall Grameen Bank system and on how clients are responding and provides reflections on what these efforts may mean for Grameen and the microfinance industry in the near future.
Issues in Mobile Banking 1: Implementation Choices
This note examines some of the key strategic issues for financial institutions considering implementing mobile banking. It suggests the aspiring MFIs to assess the market potential and devise entry strategies according to the vision of the organisation. The note also mentions that mobile banking can be a supplement or substitute to the existing product or services, depending upon the goals of operators either for reducing transaction costs or attracting new customers or for revenue. The note also suggests forging strategic operational alliances, if need be (and in between telecom and finance companies). It further advises the MFIs wishing to enter into this market to develop compatible hardware and appropriate software in addition to financial modelling for providing these kinds of services.