Customer Experience Playbook

16 Jun 2016

CGAP partnered with Janalakshmi, the largest urban microfinance institution in India serving 3 million poor Indian women, and global development advisory, Dalberg, to understand the Janalakshmi customers’ journey and design and test customer experience improvements for them. One of the outputs from this work is this Customer Experience (CX) Playbook, which aims to help FSP staff serving poor customers, to implement customer experience improvements, and ultimately influence their organizations to build a culture of customer-centric innovation.

The CX Playbook is divided into the following eight sections detailing different stages of embedding customercentricity within the organization. Each section contains operating principles and useful tools for each stage. The Playbook also describes typical challenges faced in implementing such projects along with suggested solutions. Use the CX Playbook for either end-to-end CX projects or specific aspects such as user research or CX ideation.

  1. Introduction
  2. Customer Experience (CX) 101
  3.  Managing CX Projects
  4. Customer Research
  5.  Develop CX Ideas
  6. Prototyping
  7. Measuring & Sharing Results
  8. Scaling Up
  9. Adopting a CX Culture

Microfinance Credit Risk Management Tool Guides: Credit Scoring

14 Apr 2016

Scoring is a method of assigning a numerical value (the “score”) to a client in order to predict how likely he or she is relative to others to experience some event or perform some action in the future. This is predicated on the notion that past behavior is indicative of future behavior for populations with similar characteristics. By analyzing a sample of historical client and business data, trends are deduced to better understand (potential) clients and predict future events such as credit repayment. This tool guide focuses on credit scores – a number that represents an assessment of the creditworthiness of a person, or the likelihood that the person will repay a loan. Financial institutions use scoring models to assess the credit risk of a borrower and aid in the credit evaluation processes. A score can be applied along the steps of the microfinance lending methodology, providing objective inputs to make the process more effective and enhance standards and controls. Credit scoring models are not intended to replace loan officers and other commercial staff, but rather to complement and facilitate their work by supporting assessment of willingness to pay.

The Green Index: An Innovative Tool to Assess the Environmental Performance of MFIs

29 Mar 2016

The idea of the Green Index emerged from an observation: in the microfinance sector, there is still no clear understanding of what is meant by “environmental performance in microfinance” and no commonly accepted tool to assess the environmental performance of microfinance institutions (MFIs). The e-MFP Microfinance and Environment Action Group therefore decided to develop a practical tool to assess the environmental performance of a microfinance institution.

The objectives of such a tool are:

  • to foster reflection on environmental responsibility and the triple bottom line approach in microfinance;
  • to promote the integration of green indicators in microfinance performance assessment tools (such as social performance management tools);
  • to have a pedagogical approach by disclosing the main environmental strategies that can be adopted and implemented by an MFI.

The State of Microinsurance: The insider’s guide to understanding the sector

08 Oct 2015

This annual magazine is the result of a major initiative by the Microinsurance Network bringing together some of the most authoritative voices within the field of microinsurance with the objective of taking stock of the sector and providing sector players with an in-depth understanding of the context in which they operate.

In this first edition of the magazine the reader will, amongst other, learn about the state of microinsurance across the globe using data from the World Map of Microinsurance programme, failures and innovations in distribution of microinsurance by MicroEnsure, approaches to regulation across the globe from A2ii, the ILO’s Impact Insurance Facility take on the complexity of assessing and meeting demand, and the role of microinsurance in disaster risk management strategies from the Geneva Association.

Arab Credit Reporting Guide

02 Oct 2015

The Arab Credit Reporting Guide was prepared by IFC’s and AMF’s credit reporting experts as well as external credit reporting experts1. IFC and AMF are grateful for the support from Arab central banks, credit registries in each country and credit bureaus, where present, for their input to the credit information sharing survey distributed and to the case studies presented in this guide. IFC would also like to acknowledge the support of its donors, without whom IFC’s MENA Credit Reporting Program’s activities would not be possible. In specific we would like to thank donors contributing to the MSME Technical Assistance Facility, a joint initiative between IFC and the World Bank. The facility is supported by UKaid, Department of Foreign Affairs, Trade and Development Canada, Danish International Development Agency, Japan, and Switzerland’s State Secretariat for Economic Affairs.

This guide endeavors to inform stakeholders of the credit information industry in MENA, including central banks, CRs, CBs, international agencies, and lending institutions. Importantly, we hope that this guide will focus attention on the development of the industry in the region. The result would bring large benefits to the ultimate stakeholder, the consumer.

Alternative Delivery Channels and Technology

13 Aug 2015

The ambition to reach full global financial inclusion requires that we address the challenge of delivering appropriate and affordable financial services to an estimated 2.5 billion unbanked individuals globally. One response to this challenge has involved the design of products such as microloans, low balance savings accounts, micro-insurance, and mobile money transfer that are specifically tailored to meet the needs of the often excluded low-income mass market. Delivering these products and services on a large scale, however, cannot be achieved without accessible channels that lower the cost of service and increase reach.

Alternative delivery channels, defined as those channels that expand the reach of services beyond the traditional bank branch channel, have emerged as a result of innovations in information and communication technology and a shift in consumer expectations. ADCs are transformative in nature, accommodating the demand for access to financial services “anytime, anywhere, anyhow”. They rely heavily on information and communication systems and devices ranging from ATMs to mobile phones, all of which enable the instant transmission of financial and non-financial information between the customer and financial services providers. New technologies increase efficiency through automation, reduce operational costs, and improve service quality by cutting down on waiting times and offering more convenient access and reduced cost to the end-consumer.

Building the Foundation for Understanding Transparent Pricing

28 May 2014

Within the microfinance community, there is a significant gap between our strong desire to understand true prices and our limited technical knowledge about how to calculate true prices.

This training session, developed by the world’s leading pricing expert, introduces the foundations of transparent pricing. It will provide you with the tools you need to demystify transparent pricing. Featuring practical examples, screenshots from the Calculating Transparent Prices Tool and practice exercises, this educational resource provides you with classroom-quality lessons for a solid foundation in the concepts of transparent pricing

This introductory level training session gives an overview of:

  • What pricing means
  • Systematic examples showing how cash flow is fundamental for calculating true price
  • Suggested exercises to cement the learning

Avoidance of Over-Indebtedness: Guidelines for Financial and Non-Financial Evaluation

06 May 2014

“Avoidance of Over-indebtedness: Guidelines for Financial and Non-financial Evaluation” is a tool for financial service providers that want to incorporate good client protection practices into their evaluation processes for individual loan clients. Specifically, the tool provides guidelines for determining a loan applicant’s capacity and willingness to repay a loan. A careful evaluation process is critical to avoiding client over-indebtedness, the situation in which a client cannot repay a loan without sacrificing his or her quality of life. Financial service providers have a responsibility to actively prevent client over-indebtedness.

Strategic Marketing for MicroFinance Institutions

05 May 2014

Microfinance has demonstrated its potential to assist the poor to make significant strides towards reducing their vulnerability, improving their livelihoods, paying for basic health care and financing their children’s education. Many microfinance Institutions (MFIs) have demonstrated an ability to provide financial services to poor people on a sustainable, profitable basis. Together, these facts have attracted a great deal of donor of money and a wide variety of organisations into the Microfinance sector. As a result, a growing number of markets are becoming extremely competitive and clients have an ever-widening choice of financial service providers to choose from. With the vast majority of MFIs functionally confined to offering short-term credit products, the clients are effectively given the choice of staying with or leaving their current service provider at the end of every loan cycle. In competitive markets they are exercising this choice with unflinching regularity … and many are “deserting” their service provider to try another or simply to take a “rest” from the rigours of MFIs’ terms and conditions. The extensive literature documenting the reasons for and cost to MFIs of high levels of “drop-out”, “exit” or “desertion” has spurred them to re-examine their products and delivery systems to respond better to clients’ needs. Furthermore, the growth in competition between MFIs in many markets has meant that growing numbers of MFIs are responding by seeking to better understand their clients’ demands and preferences and thus taking a market-led approach to their business.The development of a more client-responsive, market-led approach to Microfinance is an important watershed in an industry hitherto largely dominated by the misconception that simple replication of successful models could achieve massive and sustainable scale worldwide. As Hulme notes, “Ironically it is the success of the “first wave” finance for the poor schemes…that is the greatest obstacle to future experimentation”.

Financial Awareness Scoping Initiative

05 May 2014

In recent years, practitioners as well as policy makers have realized that financial literacy is akey dimension of financial inclusion. Extensive efforts at increasing the supply of financialservices often do not yield adequate results due to a lack of financial knowledge amongstthe population. Dr D Subbarao, Governor of the Reserve Bank of India, has drawn attentionto the key role of financial literacy in promoting inclusion by observing

“Financial literacy and awareness are integral to ensuring financial inclusion. This is not just about imparting financial knowledge and information; it is also about changing behaviour. The ultimate goal is to empower people to take actions that are in their own self interest.When consumers know of the financial products available, when they are able to evaluate the merits and demerits of each product, are able to negotiate what they want, they will feel empowered in a very meaningful way.”1[Dr.Subbarao.D, 2010]