Microfinance Practice: Re: [MFP] Isn't this obvious?

All,

Dear all,

From marketing point of view, it happened in all industries.

In the beginning, it was almost always seller market situation. Few sellers used production concept (produce as much as possible stander product) to offered a same or similar product. Take it or leave it. In micro-credit era, they called it women group lending methodology. An MFI is very proud when they showed zero NPL and high ROE.

Then it shifted to buyer market that happened when many sellers offer the same or similar products. Buyer had a stronger position. What happened is over-indebtedness. Many donors felt bad about it and started questioning where is the client in the success indicator when some of them became poorer?

Finally it came into the marketing era where the customer become more demanding. The seller are forced to offer more variety products. That is why they need to focus on the client need and want that they are going to be fulfilled. It is a natural shift. In marketing we call it customer focus, instead of client centricity. But in marketing we do not believe that the customer know what they want or need! We even create their need and want. Steve Job never ask did anybody need or will need an iPad or iPhone. What we do in marketing is keep observing the client behaviour. This is exactly what Rutherford did in microfinance. Then it come back to our own choice which clients and which need and want of the clients that we are going to fulfil and how we are going to do it.

Best,

Tjandra Irawan

+62 818 128 404, +62 813 2871 9885

http://tjandrairawan.multiply.com/

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Skype: tjandrairawan

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On Apr 11, 2013, at 2:04 AM, Jeffrey Ashe <jaashe@aol.com> wrote:

Dear Malcolm, Mahlom and Colleagues,

As one of those who got this business started back in 1980 when we lifted the idea of group lending from FEDECREDITO in El Salvador and launched what became a world wide movement I am embarrassed to admit that we did this from a position of woeful ignorance. Rutherford has had a key role educating us into how the poor actually manage their money and showed us what a relatively insignificant role we play in their financial lives. In those days we never asked how the poor saved and borrowed or really what they wanted. We saw the model and I introduced it to Accion. It seemed like it worked, people were taking out loans and repaying them, it was reasonably simple and low cost, group members spoke well about the methodology and recounted how they were helping each other and it offered for the first time a methodology that could cover its operating costs. We were looking at this from the perspective of the agency. The rest was fine tuning the model to make it more efficient so it could be expanded. If you have something that works reasonably well and this is the product you want to offer, why ask a lot of questions.

Jeff

Jeffrey Ashe
jaashe@aol.com

-----Original Message-----
From: Malcolm Harper <malcolm.harper@btinternet.com>
To: MicrofinancePractice <MicrofinancePractice@yahoogroups.com>
Sent: Wed, Apr 10, 2013 2:31 pm
Subject: Re: [MFP] Isn't this obvious?

Indeed, it is odd that 'client-centricity' (what a ghastly neo-logism, maybe we should call it 'decent marketing') is the latest new microfinance buzz word.

But the whole aid world from which microfinance has emerged is pretty odd, it's never clear whether the 'client' is the donor agency to whom 'we' are selling the project or the poor person who is meant to benefit from it. Usually it's the agency.

And microfinance inhabits the awkward middle ground between doing good and doing well, 'social enterprise' is the buzz word for that.

Most do-gooders studied the social sciences, most do-wellers studied business (whatever science that is). The middle ground is confusing, often hypocritical, but maybe something useful will emerge. Insh'allah.

----- Original Message -----

From: Mahlon Barash

To: MicrofinancePractice@yahoogroups.com

Sent: Wednesday, April 10, 2013 5:57 PM

Subject: [MFP] Isn't this obvious?

What I can't understand is why "Client-centricity is the latest buzz word in financial inclusion." It sounds like some recent revelation that MFIs should listen to what their clients want. It seems this should have been very obvious from the beginning of the history of microfinance. It seems obvious that products should be designed based on client's needs not what the institution thinks they need.

Mahlon Barash

Lima, Peru