Paper

Lessons from MicroSave's Action Research Programme (2005)

Steps-to-success for a microfinance institution

This briefing note documents lessons learned by MicroSave in 2005 about market-led microfinance under its Action Research Program (ARP). It discusses lessons learned about the following:

Strategy:

  • It is important that there is strategic alignment and a shared vision among the staff, management and stakeholders of a microfinance institution (MFI);
  • It is also important to have strategic marketing, a re-worked approach to technical assistance, excellent governance mechanisms and appropriate risk management.

Branding:

  • Branding is more than just the logo;
  • It is important to take care when contracting out;
  • It is important to link into the strategy of the financial institution.

Post transformation savings mobilization: success in this area involves:

  • Marketing and segmentation;
  • Differentiation and positioning;
  • Staff incentives for saving.

Lending: successful lending involves:

  • Pilot testing;
  • Loan portfolio audit;
  • Compliance.

Communications and customer service: success in this area involves:

  • Feedback loops;
  • Growing a service culture throughout the institution.

Performance: success in this area involves:

  • Incentives for staff.

Success in electronic banking involves:

  • Realizing that electronic banking is a necessity;
  • Avoiding a mis-match between promises and delivery;
  • Making a choice to become part of a larger outsourced solution.

About this Publication

By Cracknell, D., Sempangi, H., Mukwana, P., Mugwang, T., Parrott, L., Wright, G.
Published