projecteverest

Social Consulting

Malawi - Social Consulting and Microfinance

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Social Opportunity

Sustainable Development Goal 8: Decent Work and Economic Growth

Social Consulting in Malawi aims to address several issues surrounding financial inclusion:

1) Lowering access barriers to finance: in Malawi, access to finance is the biggest obstacle to business (Malawi Enterprise Survey 2014). This barrier exists both in terms of cost and geography. By creating a tech-enabled microfinance institution, we are looking to lower operating costs and increasing geographic reach to increase access to financial services.

2) Financing productive assets, not consumption loans: one of the key criticisms of microfinance is that it can create debt traps for consumers, where consumers have to re-borrow to pay off the initial loan. By having strict criteria to finance productive assets which improve economic outcomes for consumers, we are looking to enable consumers’ independence and avoiding creating debt traps.

3) Making productive assets affordable to more people: productive assets often involve high upfront costs, which make it unaffordable for everyday consumers. This locks out many consumers from being able to improve their economic situation. By allowing this cost to be spread out across time, this makes key assets more affordable to everyday consumers.

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The February Social Consulting team focused on developing a better understanding of our customer base. through gaining a better understanding of our customers, and their interaction with us as a business, we gain insight into what we can do to improve our service to them. This is all in the aim of reducing the  high default rate we are currently experiencing with our payment plan loans. To do this, we focused on interviews with our customers to understand why they are defaulting, and not...

Kurt Michl
by Kurt Michl
0 Votes
Comments 0
Kurt Michl

https://projecteverest.crowdicity.com/post/964670 Lean Phase:  Customer Segment Assumption:  The previous risk profiling tool was inaccurate (the weightings aren’t accurate or the metrics may not be explanatory), with less than 50% of the defaulting and non-defaulting customers being identified correctly ( see data here ). This may be due to the scores/weightings not being based on any data, as well as potential irrelevancies in the metrics. Via surveys of the remaining customers, we...

Kurt Michl
by Kurt Michl
0 Votes
Comments 0
Kurt Michl

21 sales in February have been made in a single village (Sumani 2) where the chief is the guarantor for 19 of these sales. The chief has expressed a desire to ensure that all customers are paying. This allows us an opportunity to make the most of this situation and test the replication of social pressure and the influence of village chiefs.    Lean Phase: Channel and Revenue Assumption:  By implicating a member of the community in the assurance of payment, more we can replicate...

by Kurt Michl
2 Votes
Comments 1
Kurt Michl
Proposed Experiment

Lean Phase:  Channels/revenue Assumption:  Customer will respond positively to a prepayment proposal for the solar product and will be willing to trust in us or in agent to make payments without possessing the product. The success of the LayBy in the Blantyre Markets would be continued in other segments of the market.  Time Period:  1 week (early december 2019) (3 months observation) Criteria: %  new customers on and expressing interest in a prepayment model.  Success metric:...

Kurt Michl
by Kurt Michl
1 Votes
Comments 1
Kurt Michl
Proposed Experiment

Lean Phase:  Channels/revenue Assumption:  People are willing to work with us to design a tailored payment plan. People will understand and follow a payment plan that they have responsibility for designing. A payment plan that suits the customer better will have higher repayment.  Time Period : 1 Week (July week 1) Criteria:  repayment % Success Metric:  Success Point:  70% of new customers are willing and able to work with us to design a payment plan for themselves. More...

Kurt Michl
by Kurt Michl
0 Votes
Comments 1
Kurt Michl
Proposed Experiment

We need to find a more efficient way of collecting customer information if we are to build a risk-model. Rather than collecting information from people after the sale has been made, we can either use automatic processes (USSD) or we must collect this information at Point Of Sale.  Lean Phase:  Channels Assumption:  USSD is a viable channel for collecting information Time Period:  1 Month (March 2019) out of country. Criteria:  % of responses to the survey.  Success Metric:...

Kurt Michl
by Kurt Michl
0 Votes
Comments 2
Kurt Michl

Over the course of the past 9 months, we have been observing the results of the testing phase for the solar project and also the individual loan repayments. https://docs.google.com/spreadsheets/d/1xkM4rCaZvt6ny1iC7aOoSeye1ZcnQH-5nQgxYKcaOA0/edit#gid=783994311 The payment plan we have seen in use has also changed over the past months.  NOTE: There is a margin of error in our payment tracking, with 4.5% of current payments coming from mobile money numbers that are not registered in our...

Kurt Michl
by Kurt Michl
0 Votes
Comments 4
Kurt Michl

Introduction:  Throughout February, Risk Profiling and CRM Surveys were conducted throughout the surrounding areas of NAYO, and villages of Nancholi, Baluti and Nikoka. Relevant Links: Proposed Experiments: https://projecteverest.crowdicity.com/post/964670 https://projecteverest.crowdicity.com/post/1003700 Through conducting these two experiments, the qualitative findings are stated below. Work progress:  The risk profiling survey was formatted around questions...

Ella Walburn
by Ella Walburn
0 Votes
Comments 0
Ella Walburn

Any consequences of non-payment are not enforceable without a way of knowing exactly where to find existing customers. Having details of where they live will increase pressure on them to repay their loans, and make consequences more enforceable. Even though the feasibility of us following up loans is not necessarily cost-effective, it may also give more pressure to customers if they know we know where they live.  Lean Phase:  Revenue/channels Assumption: People are able to give...

by Kurt Michl
0 Votes
Comments 0
Kurt Michl
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