Voices of Microfinance Clients: A Study of Microfinance Clients’ Concerns, Perceptions and Delights

Client perspectives on consumer protection and responsible financial discourse are deeply under-represented in the microfinance sector. There exists very little market-specific analysis of the concerns and issues facing clients in Indian microfinance context. This study was therefore undertaken at a nation-wide level to highlight MFI clients’ experiences, their general perceptions, concerns and delights in dealing with the MFIs. The study involved 10 focus group discussions, 40 in-depth interviews with clients of 10 MFIs in 3 states, and interviews with 1,080 clients of 15 MFIs in 5 states.

Study findings indicate that clients are generally satisfied with the MFIs. Over the past few years fair and respectful treatment of clients has been one of the important focus areas for MFIs. However, there is still scope to further improve client experience by addressing concerns which clients face. Uncertainty related to repayments is one of the major sources of stress for the clients. Recommendations for MFIs include:

• Build some flexibility in repayment schedules and rescheduling loans in case of clients facing cash flow issues;
• Adopt softer approaches for enforcement of joint liability so that stress and unpleasantness associated with joint liability can be avoided;
• Improve quality of training of MFI field staff on soft skills so that they are more polite and considerate in their interaction with clients, particularly when handling extraordinary situations like overdue follow up, client facing any exigency or while enforcing joint liability; 
• Use more audio-visual mediums that clients can understand more easily when communicating about loan products and processes;
• Train staff to focus on providing clients with correct information regarding products and to lend clients as per their needs and not as per the business targets.
• Implement periodic sector level studies and projects like this one to solicit client level feedback on an aggregate level.