[Experiment Adopted]: Village Banks (4/4) - Channel Preference

by

William Lee | 5 months ago | in Malawi - Social Consulting and Microfinance

Lean Phase: Channel Testing 

Assumptions: customers served by the village bank lack access to formal credit, or prefer to access credit through village-based credit systems). Reasons may include the fact that:
1. Distance to a formal institution is too far, or costs too much to visit frequently
2. People were rejected in their application for a loan, and thus excluded from formal credit

Time Period: 1 week (or time taken to survey 6-8 village banks) 

Success Metrics:
1. % of people who prefer obtaining loans from village banks as opposed to formal credit institutions
[ideally, sample size of 10+ per village bank; otherwise, based on anecdotal evidence from village chief] 

Criteria:
Success Point: if more than 50% of customers prefer accessing credit via village banks than other alternatives (including, but not limited to, formal credit institutions)
             Green Light: proceed to Loan Structure experiment
Orange Light Point: if 20-50% of customers prefer accessing credit via village banks than other alternatives (including, but not limited to, formal credit institutions)
             Orange Light: Why do they prefer a formal credit institution? Is it a) more trustworthy, b) can approve higher loan amounts, or c) other?
Failure Point: if less than 20% of customers prefer accessing credit via village banks than other alternatives (including, but not limited to, formal credit institutions)
            Red Light: look at other ways in which we can service the needs of these customers - learning from why they prefer other channels.

Experiment Build:
1. Create a survey based on the above metrics
2. Identify village banks to validate assumptions with
3. Organise village visits
4. Execute survey
5. Measure results and post experiment results