Project Everest

Social Consulting

Microfinance (Social Consulting) - Malawi

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Access to socially beneficial assets through access to capital
Vision: Decentralised bridge of capital between the developed and developing world

PROBLEM
Financial inclusion is a severe limitation for the Malawian economy, as only 18% of adults have access to a bank account, with only 6% of the nation’s population having access to formal lending. Savings is also a major issue: 54% of Malawians don’t have savings, with the major cause due to lack of money after expenses (Lee, Research Summary).

Malawians are alienated from formal financial services with the major issues being:
- Lack of collateral
- High-interest rates
- Fear of indebtedness
- Low/irregular income

Formal financial institutions provide some capital, but this is usually limited to those with a strong history of financial information. If consumers do not have an adequate financial history, they are either rejected or are charged high interest rates. Organisations external to the commercial banking system, such as FINCA (for-profit business) and Umunthu Microfinance (charitable organisation) have tried to provide access to finance to these communities, however it remains difficult for individuals to obtain loans through these organisations.

Without the opportunity to expand their businesses or pursue economic opportunities, Malawians are hampered in their capability to improve their financial situation and increase their income. Whilst some ingenious solutions have been created locally such as village banks (a collaborative effort by a community to distribute loans to their community), these organisations often cannot meet the demand among their communities, nor issue large-scale loans.

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  1. Kurt Michl
    181 pts
  2. olivedippie
    104 pts
  3. Rose Martin
    85 pts
  4. Courtney Dudgeon
    80 pts
  5. Sebastian Arnold
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Experiment Results

Experiment Design Post: https://projecteverest.crowdicity.com/post/2005350 Lean Phase: Customer Segment  Assumption: Village banks are willing to meet with PEV and discuss their operational procedures, including collateral requirements, interest rates and capacity to loan. Results:  The Microfinance II Team contacted 10 village banks throughout July 2019. Since July 2018, PEV has contacted 15 village banks in the Blantyre region. The Microfinance II Team determined...

Courtney Dudgeon
by Courtney Dudgeon
0 Votes
Comments 1
Courtney Dudgeon
Customer Segment

Through information gathered in our profiling experiment, the Microfinance II Team has identified that our customer segment is village banks located in Blantyre, Malawi. We have found that village banks identify with the problem of inadequate access to finance. This was determined by holding meetings with numerous village banks and analysing data that had been previously collected by the Social Consulting Team in July and December 2018. In total, this information has been validated from data...

Courtney Dudgeon
by Courtney Dudgeon
0 Votes
Comments 1
Courtney Dudgeon

[Proposed Experiment] Testing solar CRM system Social Consulting Malawi July, 2019 Lean Phase: UVP   Assumptions : The current CRM system has various errors and shortcomings. The team intends to isolate and test a singular problem while assuming all other functionalities are working as intended. Currently, customers can pay for the solar product using either cash or via mobile money. This applies to both deposits and repayments. To test that the entire CRM system is working as...

Jerry Li
by Jerry Li
0 Votes
Comments 0
Jerry Li
Proposed Experiment

Lean Phase: Solution Assumption: Village banks are willing to share their accounting information and customer data with PEV, in exchange for a low interest loan to be used as increased capital for the village bank, therefore allowing them access to larger loans and more frequent loans for their customers. The end goal for this currency test would be to get village banks to use a digital tracking system on Google Pixel mobile phones to enter accounting data and records, that we could...

by Courtney Dudgeon
0 Votes
Comments 2
Courtney Dudgeon

Lean Phase: UVP Assumption: Village banks risk profiled are willing to meet with PEV, and are open to receive a loan from PEV. Time Period: 7 days Success Metric: The number of village banks with an acceptable variance of data input are interested in receiving a loan from PEV. The team will ask 8 village banks whether they want a loan. CRITERIA Green Light: Proceed to offering a loan with its features mapped out to village banks, including interest rate and a contract....

by Abigirl Maminimini
1 Votes
Comments 0
Abigirl Maminimini

Lean Phase: UVP Assumption: Village bank risk can be diversified, where characteristics included in each village bank’s profile are appropriate indicators of risk. These characteristics include: Village bank interest rates (min. 15%) Claimed default rate (approx. max. 5%) Requirement to join bank (min. deposit required) Incentive to repay (heavy social pressure - open to interpretation) Number of members ( =/> 25; max.2 under 25). Time Period: 2 days Success...

by Bernard Ip
1 Votes
Comments 0
Bernard Ip
Adopted Experiment

Lean Phase: Customer Segment Assumption: Village banks are willing to meet with PEV and discuss their operational procedures, including collateral requirements, interest rates and capacity to loan. Time Period: 2 weeks  Success Metric: The success metric is the number of village banks who are willing to share information on operational procedures. The team will interview 10 village banks.  CRITERIA Green Light: Proceed to offer testing with village banks. Success...

by Courtney Dudgeon
1 Votes
Comments 1
Courtney Dudgeon
Work Update

Since the Microfinance team has been involved with the solar project, we have learned a lot about how a potential Microfinance system could be applied to asset products such as the solar light. However, our high default rates and inability to track payments with automated processes also shows us that there is a long way to go in terms of understanding how to manage and run this system effectively. As a team, we still need to explore a few things in order to guarantee that this system can...

Rose Martin
by Rose Martin (Admin)
1 Votes
Comments 1
Rose Martin
by
Rose Martin (Admin)
Proposed Experiment

Lean Phase: Solution Assumption: The solar team are ‘ willing to pay ’ for access to the Microfinance ‘product in a box’ solution, and the solar team will prove this by paying with usage of the system. Time Box: 2 weeks. Success Metric: The success of this experiment will be measured by whether the solar team actively uses this ‘product in a box’ system, which will be tested with sales of the solar unit. Criteria: Green Light: Proceed to utility testing and iterating...

Rose Martin
by Rose Martin (Admin)
0 Votes
Comments 1
Rose Martin
by
Rose Martin (Admin)
Proposed Experiment

Lean Phase: UVP Assumption: The solar team is willing to work with PEV on their Microfinance ‘product in a box’, as it will allow them access to a greater customer base if they are able to loan their solar product effectively and efficiently. Assumptions related to this: This relies on the ability of the Microfinance team to explore and efficiently set up the following attributes of this ‘product in a box’: A CRM that is able to track payments effectively A list of security...

Rose Martin
by Rose Martin (Admin)
0 Votes
Comments 1
Rose Martin
by
Rose Martin (Admin)
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