Measuring and Acting on a Dropout Ratio
This is a presentation made on the utility of client dropout ratios during the annual general meeting of the SEEP network.
Ratios, an important decision making tool, are often used to improve an institutions' social and financial bottom line. The author talks about client dropout ratio which has several managerial uses like:
- Making financial and outreach projections;
- understanding the dynamics between clients and the institution;
- Identifying red flags;
- Internal benchmarking;
- Providing a basis for staff performance management.
However, decisions based solely on quantitative measures may not address the core issues underlying client dropouts:
- Dropout ratios analyzed across branch locations, products or market segments do not always give adequate information and possess value only when superimposed with qualitative information obtained from clients;
- Some of the major reasons cited in the author's studies are interest rate level, group methodology policies and household financing needs, which are not captured in quantitative analyses.
Moreover, the use of ratios is challenging because of the difficulty in:
- Capturing information without automation;
- Comparing with others;
- Knowing what they are really reflecting;
- Using them for trend analysis.
The author concludes by re-emphasizing that such ratios in isolation may be a questionable measure and have limited use in decision making unless supplemented with exit interviews, focus groups discussions and surveys in order to identify problems that lead to dropouts.
