Microfinance Practice: RE: [MFP] Four recommendations for learning from clients

Hi,

Here is an example that was observed; self-designed by (all Muslim) women, in a CARE dairy program in Bangladesh

- Save and accumulate group capital

- When sufficient, group uses it to buy a cow (shared ownership) and give it to one of the members as a custodian (this member has already expressed interest, and group has agreed that she is needy and has the ability to have/ maintain another cow, given space and capital feasibility).

- Custodian member takes care of maintenance expenses (fodder, medicine, insemination)

- First calf becomes property of the custodian (sharing of assets)

- Morning milk is sold by custodian and evening milk money is deposited into group account, to be shared by all members (sharing of revenue).

- After 2^nd calf, group members decide if they want to take back the calf or the cow; to be given to another member

- If cow dies for some reason, group decides if it was because of neglect or for unexpected reasons; and accordingly, custodian is asked to repay or left alone (risk sharing and in-built insurance).

- And the cycle continues..

- The programme has established links with private dairy company to collect milk daily from women managed milk collection centre; which makes it easier to know, how much milk was sold and how much money can come directly from the milk coop into the group fund.

Other groups were using this, with some variations in the arrangement.

Thanks,

Anuj

From: MicrofinancePractice@yahoogroups.com [mailto:MicrofinancePractice@yahoogroups.com] On Behalf Of Hendricks, Lauren
Sent: Tuesday, April 09, 2013 3:10 AM
To: MicrofinancePractice@yahoogroups.com
Subject: RE: [MFP] Four recommendations for learning from clients

Hi Malcolm,

CARE has done VSLA in Somaliland (northern Somalia). A couple of issues:

1) The prohibition of usury in sharia law, as I understand it, is based on that fac tthat it is unethical to make money off of money without sharing in the risk. In this case because all of the group members share the profit, but also share the risk of the loan if it doesn't get repaid, then it doesn't count as usury.

2) While usury isn't allowed, profit share is, and the group can ask for a profit share instead of interet for loans that are invested in business.

3) Finally, groups set their own interest rates, so they can choose not to charge interest. While their share out will be less, they still get the value of their accumulated savings, and they get access to interest free loans over the course of the year.

Kim Wilson from Tufts has done some work with an Islamic banking professor on VSLA and sharia law, so you might contact her as well to get more info.

Lauren

Lauren Hendricks

Executive Director, Access Africa

CARE USA

+255 784 348474

Skype: lauren_hendricks

From: MicrofinancePractice@yahoogroups.com [MicrofinancePractice@yahoogroups.com] on behalf of Hugh Allen [hugh@vsla.net]
Sent: Friday, April 05, 2013 10:16 PM
To: MicrofinancePractice@yahoogroups.com
Subject: RE: [MFP] Four recommendations for learning from clients

Agree with you 100% Malcolm. Don’t agonise about how to treat poor customers. Just ask if it’s something you’d like for yourself and act on that basis.

From: MicrofinancePractice@yahoogroups.com [mailto:MicrofinancePractice@yahoogroups.com] On Behalf Of Malcolm Harper
Sent: 04 April 2013 18:26
To: MicrofinancePractice@yahoogroups.com
Subject: Re: [MFP] Four recommendations for learning from clients

Wow ! Poor people have to be treated as customers ! What a revolution !

Malcolm

----- Original Message -----
From: cgap@worldbank.org
To: MicrofinancePractice@yahoogroups.com
Sent: Thursday, April 04, 2013 5:14 PM
Subject: [MFP] Four recommendations for learning from clients

Client-centricity is the latest buzz word in financial inclusion. Beyond the rhetoric, financial service providers have to figure out what it takes to listen to clients continuously and to implement what they are learning in the form of better products, delivery channels, or overall customer experience. A first step for providers is analyzing the value of understanding clients and how they can incorporate what they hear in ways that yield actionable insights. Some providers have client-centricity baked into their systems, operations, and human resources. For others, it is a bigger stretch to put clients at the center of the operational model.

With this in mind, CGAP and MicroSave have four recommendations for listening to and learning from clients:
Take a holistic view of the client
Listen to clients systematically and continuously
Use the right methodology
Integrate client understanding throughout operations

For more details, visit CGAP.org: http://cgap.org/news/how-can-institutions-listen-and-learn-their-clients

CGAP
1818 H Street, NW, Room P3-300
Washington, DC 20433
Tel: 1-202-473-9594 Fax: 1-202-522-3744
CGAP@worldbank.org
http://www.cgap.org
http://www.microfinancegateway.org