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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
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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
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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...

Kurt Michl
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

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...

Kurt Michl
by Kurt Michl
0 Votes
Comments 0
Kurt Michl

Lean Phase:  Channel/Revenue Assumption:  Lending institutions (banks, MFI, Village banks) have ways of knowing exactly how to find their customers/members. Such methods may include geo-pinning, sketch maps and a dependence on village chiefs.    Time Period:  <1 week (July 2019) Criteria:  existence of a method for tracking location.  Success Metric: Success Point:  all three types of lending institutions have methods of locating customers.  Green Light:  use these...

Kurt Michl
by Kurt Michl
0 Votes
Comments 1
Kurt Michl

Lean Phase: Channel Assumption: Sending texts manually to all existing customers on the payment plan will improve relationships with customers and generate a more efficient communication system. The content of the texts will initially be payment reminders and then, when we have the capacity, we will also include balance updates and confirmation texts. These texts will help customers to make their repayments in a more timely manner and will provide more confidence regarding this payment...

Kyana Chan
by Kyana Chan
0 Votes
Comments 1
Kyana Chan

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 will be able regress the data to fit a model on which...

Kyana Chan
by Kyana Chan
0 Votes
Comments 0
Kyana Chan
Problem

This post outlines the fundamental problems in the financial space in Malawi, and are detailed further in other posts. The two fundamental issues are that there is a huge lack of access to capital, and a huge lack of financial/business education.  Malawi remains one of the poorest countries in the world, with 90% of the population living on less than $2/day, and 75% living below the lowest poverty threshold of $1.25/day (Human Development Report, 2011). The majority of Malawians are...

Kurt Michl
by Kurt Michl
4 Votes
Comments 2
Kurt Michl
Proposed Experiment

As discussed in the post specifically on the topic of Village Banks, these organisations are proving to be an extremely effective way for members to generate capital from their savings, and gain access to further capital through microcredit distributed  within these groups. More information and context can be found (and will be useful to understand this idea) by following the link https://projecteverest.crowdicity.com/post/572973. We have had quite a lot of interaction with these village...

Kurt Michl
by Kurt Michl
7 Votes
Comments 4
Kurt Michl
Proposed Solution

Over the past few weeks in Malawi, we have gained some knowledge on informal institutions we are calling village banks. They operate as a savings fund which provides microcredit to its members in the aim of generating savings for the fund, and it's members. There is a detailed explanation on how these institutions work in the post about the village banks; https://projecteverest.crowdicity.com/post/572973. An idea that was generated from the discussion on the village banks post is an...

Kurt Michl
by Kurt Michl
5 Votes
Comments 2
Kurt Michl
Proposed Experiment

Background Village banks have proven to be a fascination due to their ingenuity in providing their communities access to loans that normally would be totally inaccessible due to a lack of collateral. A detailed summary of how they operate can be found here . In short, village banks can reliably distribute loans to their communities with a very low risk of default. From our interview with one village bank, we discovered that they were not capable of providing a loan to everyone who...

Henry Baldwin
by Henry Baldwin
10 Votes
Comments 5
Henry Baldwin

In Malawi, we have come across the term Village Bank quite a bit, and we had made some assumptions surrounding how they work. Over the course of July, we have had several meetings with three different village banks, and have been able to develop a good understanding of how they function and the possible avenues for growth associated with their structure.  These village banks are very common across Malawi, we are told, and just in our study region of Nancholi, there are more than twenty....

Kurt Michl
by Kurt Michl
14 Votes
Comments 11
Kurt Michl
Proposed Experiment

Over the course of July we have been able to gather a lot of information on how commercial lending is currently administered, but also a lot of information on more informal lending mechanisms. There are recurring themes in both of these two systems which is to utilise social pressure to ensure that the principal is repaid.  The idea is to distribute a loan to a group of people, rather than to any one individual. Under this mechanism, if any single member of the group is struggling with...

Kurt Michl
by Kurt Michl
16 Votes
Comments 12
Kurt Michl
Proposed PROJECT

This is a rudimentary moonshot design for long run competition, which I have attempted to tailor to current solar-based micro-financing operations in Malawi. An issue associated with micro-finance is the inherently high interest rates. There is high default risk and monitoring costs are proportionally high. Whats more, we discovered today that there are already several institutions providing services in this market, which may make it difficult to scale effectively as a for profit,...

Kurt Michl
by Kurt Michl
16 Votes
Comments 18
Kurt Michl
 

Kurt Michl

Australia

Joined this community on Jun 30, 2018

Bio I'm studying a double degree in Finance and in Actuarial Studies at the ANU. My majors are Capital Markets and Economic Studies, and I am in my fourth year.

University or Company
Other

Degree or Work area
Business

Project completed as trekker (if applicable)
Social Consulting

Country you Trekked/are Trekking in
Malawi

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