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Work Update

[Work Update] Microfinance Fiji July 2019

After a long summer looking into the viability of becoming a Microfinance institution in Fiji, the Social Consulting project looks to pivot and explore a new direction. This is because the viability of becoming a Microfinance institution in Fiji is extremely difficult because it is high risk, has large regulatory challenges, and is difficult to become profitable and sustainable.

In this sense, the Social Consulting teams in Fiji are looking into a solution that ‘bridges the gap’ between institutions and consumers wanting financial solutions, without becoming the institution itself.

Our research up to this point has been heavily focused on the landscape around loans and credit, which is an extremely useful place to start. However we realise that financial solutions are much more than just loans, and Fijians also appear to lack access to loans because of other inherent problems such as lack of education around budgeting, saving, lack of access to financial information about financial options and documentation needed to access these. In this way, it is worth considering Fijians may not be prepared to acquire a loan until they are comfortable with managing their own finances. However, we do not currently have in-depth data around this space of budgeting, saving, and financial information and advice.

We see the process of access to financial solutions looking like:

  1. Access to budgeting and savings tools, financial information and education.

  2. Access to loan applications, different loan types that suit their needs, and ways for them to acquire necessary documentation to apply for loans.

  3. Access to a loan from a bank or other financial institution.

From our research so far, we know a lot about pain points to do with loans and credit, but not a lot about the budgeting/saving/education and business advice space.

In this sense, we need to look at the problem definition space from two avenues;

  1. The consumer side - understand what issues the consumer has with accessing budgeting/saving advice or other financial solutions, and understand how helping them to budget/save/manage cash flow effectively will make them a wealthier loan applicant.

  2. The institutional side - understand what problems FIs have in reaching their customers, and if they would see value in partnering with a third party (PEV) to reach these new customers, if they had access to information such as consumer cash flow data.

 

In this sense, we need to solidify the problem space for both of these customer segments before proceeding to offer testing or operating in the solutions space, because we need a solution that works for both customers, and one that both customer see value in. Ideally, by the end of July, we want to have offer tested this solution to customers, and financial institutions, in the hope we can continue to flesh out our MVP. 

edited on 21st May 2019, 06:05 by Rose Martin

Rose Martin 1 month ago

Status label added: Work Update

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