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
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
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
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