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> Posted by Ignacio Mas, Independent Consultant
“I feared and distrusted them: feared them because they could reject me and expose me to mortification of defeat, and mistrusted them because I did not understand them.”
In his reminiscences of youth, Alan Moorehead said this of women, but it could equally apply to many people’s attitude to banks. People’s concerns about banks are phrased in surprisingly similar terms wherever you go in the developing world. (See this clip for a typical example.)
This got me thinking: how much of people’s fear and mistrust of banks is due to a lack of understanding? Let’s explore three typical articulations of the distance between banks and ordinary people.
“Banks are for rich people; what do they want from me?”
The understanding gap here is in the motivations and intentions of banks when they approach the base of the pyramid. It’s a very human reaction: if someone who has never shown any interest in me suddenly starts cozying up, I get on guard. Banks venturing down-market need to explain where they see the opportunity, otherwise people will not believe there is a commitment or, worse, will interpret ulterior motives. This requires articulating a joint vision of success for the bank and the new client segments, and consistently demonstrating behaviors that gives credence to the claim. Equity Bank in Kenya has been particularly effective in conveying the idea that its success is intertwined with the success of ordinary Kenyans; its positioning is credible.
> Posted by Elisabeth Rhyne, Managing Director, CFI
The following post was recently featured on the Huffington Post’s Impact Blog. The post begins:
A few years ago I visited some coffee farmers in a mountainous section of Uganda. When they were due to be paid for their coffee they spent most of a day traveling down the mountain to the provincial capital. At the office of the coffee marketing company each farmer received an envelope with his payment in cash. On the long journey home the farmers often fell prey to attackers who knew their pockets would be full. A few attacks had been fatal.
For people like those Ugandan farmers, yesterday’s launch of the Better Than Cash Alliance by seven major public and private organizations is potentially very good news. The seven founders of the Alliance – Citi, the Ford and Gates Foundations, the Omidyar Network, Visa, UNCDF and USAID – have joined to promote the transition of the economic lives of the world’s poor from cash to electronic.
> Posted by Chris Dunford, Senior Research Fellow, Freedom from Hunger
Chris Dunford of Freedom from Hunger responds to a question we posed at the end of the recent post regarding Avanza: How does such new technology affect the client/loan officer relationship that is so central to the operations of many MFIs? The post begins:
Although less celebrated than solidarity group and loan contract innovations, another unique feature of microfinance is the regular face time between clients and agents of organizations from outside the isolated world of a poor person. Agents variously known as loan officers, credit officers, field agents, promoters, or animators can accompany and guide poor clients on their journeys toward mainstream society and economy and can be social intermediaries between the poor and whatever services and opportunities are available in the larger world outside their communities. The importance of such facilitation increases in proportion to the isolation of the poor, which is especially severe for women and those in very poor, rural communities.
> Posted by Laura Galindo
Within the microfinance industry we are very fortunate to have so many great resources at our disposal. The challenge for practitioners however, lies in how to effectively deliver the content to clients.
In 2011, the Smart Campaign’s Steering Committee launched a new Client Voice Task Force – whose members represent diverse stakeholder groups throughout the microfinance industry- to bring the voice of the client more squarely into the Campaign. One of the initiatives the task force identified as helpful to the microfinance industry was the development of a client education resource library. To make this happen, a group within the task force set out to compile a comprehensive list of existing client education materials that are in use within the industry. Read the rest of this entry »
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