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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

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

We have discovered the cheapest, and most cost effective lunch in Blantyre.  We are always left with leftovers after dinner, and although we are in a country where hunger is a pervasive condition, we generally throw them out. This is a huge waste of resources.  The issue is that no one wants to eat beans an rice for dinner, and then have it cold for lunch as well. However, there is a way around this.  We sometimes have the magical dinner combo: rice, beans, peas and carrots. This is...

Nikita Ramachandran
by Nikita Ramachandran
6 Votes
Comments 1
Nikita Ramachandran

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

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

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

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

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

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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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