women’s world banking ® women’s world banking workshop: savings mobilization and financial...

Women’s World Banking ®

Women’s World Banking

Workshop: Savings Mobilization and Financial LiteracyCentral Bank of Nigeria 6th Annual Microfinance Conference

February 7, 2012Jennifer McDonald


Objectives for the Workshop

Part I: Designing Products for Savings– Explore design considerations in developing savings products

for the unbanked, especially women– Assess institutional readiness for implementing new products

effectively– Discuss a case study of a product development process (Hasal

MFB)

Part II: Financial Literacy for Savings Mobilization– Develop practical techniques for implementing financial

literacy in your savings program– Ensure that financial education adds value to the customer and

to your business– Explore examples of ways to reinforce financial literacy in day-

to-day operations


About Women’s World Banking


Global Footprint

• Benin• Burundi• Ethiopia• The Gambia• Ghana• Kenya• Uganda

• Bangladesh• India• Mongolia• Pakistan• The Philippines• Sri Lanka

• Bosnia-Herzegovina• Egypt• Jordan• Morocco• Tunisia• Russian Federation Asia

Africa

Central & Latin

America

New York: Global Office

Europe, Middle East

& North Africa

• Bolivia• Brazil• Chile• Colombia• Dominican Republic• Mexico• Paraguay• Peru

RegisteredStichting

in The Netherlands

• Global microfinance network with 39 members in 27 countries• 26 million active clients, 80% women• $7 billion in outstanding loan portfolio, $3.5 billion in deposits


In the last five years, WWB’s membership shifted from predominantly credit-only MFIs to MFIs offering both credit and savings services

C&S MFIs (21)

Credit-only MFIs (18)

20112011

C&S MFIs (13)

Credit-only MFIs (26)

20062006

Product Focus


Market Research, Marketing, Branding, Alternative Delivery Channel, Financial Education, Social Communication

Product Innovation

6


Product Design for Savings

Objectives

Explore design considerations for savings products

Assess institutional readiness for implementing new products

Discuss a case study of a product development process


Savings for Unbanked Customers

WWB research in different countries finds common themes:– She saves informally or at home but is interested in options that help

her build her savings

– Her income is unpredictable and she continually juggles limited funds to meet a range of needs

– She saves for lump-sum events like school fees, weddings, celebrations or to invest in a business or home

– Key factors for deciding to save at a bank are: trust, proximity, access, and friendly, inviting service

And key differences:

– In Colombia “saving” refers to large sums of money and many poor women say they can’t save, but everyone “keeps” money at home

– In Kenya money in a bank is “dead” and women prefer to put their money to work in a business or to buy assets that generate a return like livestock

– In Pakistan all women save for their life cycle needs, if you don’t save you are “doomed”

– In India gold for your daughters’ marriage is the most common aspiration


Know Your Customer

What about in Nigeria?What about in Nigeria?


Know Your Customer

Successfully mobilizing savings is based on a deep understanding of your customers

Who I am * How I think * What I aspire for * How I want to be servedWhat I want from a bank

Focus Group, Kenya


Customer Segmentation from WWB ResearchAfrican Microfinance Bank

Segment 1: The Hard-Working Dreamer

Loyalists with Group Loans

Segment 2: The

Empowered Achiever

Loyalists with Individual

Loans

Segment 3: The Pragmatic

Planner

Non-Members Who Do Not

Use Loans

Segment 4: The Smart Shopper

Non-Members Who Use Loans

Know Your Customer

New SegmentsNew SegmentsCore Business SegmentsCore Business Segments


What are my aspirations? Why do I save? Children’s Future: “I want my children to have the best education

possible.”Business: “When I see a business opportunity, I seize it. I take risks to

achieve my dreams.” Security: “I want to buy big assets, such as high-yield cattle, a bigger

shamba or a plot for rental homes, so I can earn more money and have security in my old age.”

What barriers to saving (with the bank) do I face? Access to loans: “I use loans to grow my business and manage big

expenses.” Revolving cash: “I like to keep my money revolving. I don’t like the

idea of having “dead” money.”

How do I save now? Assets: “I save in assets because they earn me income.”

How can YOU sell savings to me? Product Diversity: “The path of success is still important to me: while I’ve achieved a lot, I’d still like guidance on how to continue to grow to meet my goals.”Convenience: “I have choices, and expect quick service, good interest rates, and convenient access to my money.”

Segment 2: The Empowered

Achiever

Loyalists with Individual Loans

Key Insights by Segment

Know Your Customer


Know Your Customer

Immersion and Open Dialogue• SEWA Bank, a cooperative

bank for women in India, offers innovative savings products

• Product design was inspired by an Exchange Dialogue – a 3 day homestay with clients

• Instead of discouraging purchase of gold, SEWA Bank understood its place as a coping strategy and to build assets

• Led to products like “Chase Your Worries Away” and “Gold for your Daughters”

Traditional market research through focus groups is only one way Other approaches can be even more effective in putting us in our customers’

shoes

Traditional market research through focus groups is only one way Other approaches can be even more effective in putting us in our customers’

shoes


Life Cycle Framework•Who is the target customer?•At which points in her life will the product be useful to her?

Customer Insights and Product Design



Youth Savings• MFB aimed to broaden appeal of

its children’s account from parents of babies to older children and youth

• Key insight: Need to target different decision-makers at different stages

• Implications: Include goal-based savings plans and educational events designed for different ages



Girls’ Savings• Key insights: Girls value

independence and they like pink

• Implications: Independence reinforced through product name “MINE”, marketing messages “The decision to save is MINE”, pink used in marketing materials and events



Pensions• SEWA Bank has over 50,000

women who save $1 per month in a pension

• Promoted through an educational program that explains the value of compound interest

• Key insight: Women value being useful in old age, and do not want to be idle

• Implication: Marketing messages appeal to women’s role as care-givers, that even in old age she will be able to help others


VisionVision StrategyStrategy

LeadershipLeadership

CultureCulture

Structure & Structure & ProcessesProcesses

CompetenciesCompetencies

Capabilities Triad

Leadership Triad

Institutional Readiness

Addition of a new product can imply as

little as minor adjustments in

processes or can have significant impact at

all levels of your organization.


• Product introductions that cause transformational change often mean that a new sales channel or business unit is necessary to offer the new product

• Significant changes across both the leadership and capability triads

• Product introductions that cause transformational change often mean that a new sales channel or business unit is necessary to offer the new product

• Significant changes across both the leadership and capability triads

• Product introductions that cause incremental change usually mean a new product is offered through the existing sales channel, for example the current set of loan officers

• Adjustments to both triads, with more change in the capability triad than the leadership triad

Incremental change Transformational change

Organizational changes associated with adding a new product can be incremental or transformational



Example of transformational change: Microfinance bank in Latin America

Background

•Received banking license in 2004•Introduced savings in 2005•Annual deposit growth rate exceeded 100% in the period from 2005 to 2009

However…

•Almost 50% of deposits were dormant (no movement within 6 months)•Predominance of large accounts, especially time deposits – 70% of savings concentrated in 20 time deposits•The brand survey indicated that the bank is perceived by low-income clients primarily as a place to access loans

Background

•Received banking license in 2004•Introduced savings in 2005•Annual deposit growth rate exceeded 100% in the period from 2005 to 2009

However…

•Almost 50% of deposits were dormant (no movement within 6 months)•Predominance of large accounts, especially time deposits – 70% of savings concentrated in 20 time deposits•The brand survey indicated that the bank is perceived by low-income clients primarily as a place to access loans



Vision

• From focus on microenterprise growth to providing a comprehensive solution to low-income segments

• Broader segmentation includes low wage earners in addition to microenterprises

Performance targets expanded to include savings and deepening the relationship with the customer:

• Number of products per client• Cross-selling targets• Focus on “reactivation” of dormant accounts

Allocation of resources to:• Fund specialized savings sales force• Marketing budget

• Becoming the champions of the savings program• Communicating the savings message at quarterly and

monthly meetings, internal newsletter

Strategy

Leadership


Changes in Leadership Triad


Competencies

• Specialized savings sales force created

• Training provided to all front-line staff

• Marketing department created, experienced marketing manager recruited

• Key processes modified (for example, deposit slips eliminated)

• Strategy development on branchless banking

• CRM system created to manage sales leads

• Customer-centric orientation

• “Passion for Service” campaign launched

Structures and Processes

Culture


Changes in Capabilities Triad


Product Design Case Study:

Hasusu Savings

Ruskiyat Badmus, Hasal Microfinance Bank


Key Messages

- Product based on customer understanding, building on observed savings strategies.

- Developed key differentiator for product compared to alternative savings options.

- Improved product through frequent product review cycles to respond to customer feedback.

- Product based on customer understanding, building on observed savings strategies.

- Developed key differentiator for product compared to alternative savings options.

- Improved product through frequent product review cycles to respond to customer feedback.


Financial Literacy for Savings Mobilization

Objectives

Develop practical techniques for implementing financial literacyEnsure that financial education adds value to customer and to

institutionExplore ways to reinforce financial literacy in day-to-day

operations


Financial Literacy for Savings Mobilization

Customers know that saving is important, but struggle to meet goals as they juggle competing needs

Customers know that saving is important, but struggle to meet goals as they juggle competing needs

Financial education presents saving at a bank as a viable and beneficial option

Financial education presents saving at a bank as a viable and beneficial option

Financial education needs to be tied to business outcomesFinancial education needs to be tied to business outcomes

Key Principles in WWB ApproachKey Principles in WWB Approach


Making Financial Literacy Programs Work

For the Customer:• Bring the classroom to her• Make it interactive, concrete and

practical• Develop goals and savings plan• Introduce tailored account option

• Link to sales team for follow-up• Reinforce financial literacy

through materials used in day-to-day banking



• Images of her goal on passbook

• Customer-defined account nickname e.g. “Fola’s School Fees”

• Progress bar on receipt, mobile phone or ATM

• Easy savings calculators

• Flip books for sales team reinforcing messages

• Tools for understanding passbook (account balance, etc.)

• Posters, videos in branch

Ideas for Reinforcing Financial Literacy in Day-to-Day BankingIdeas for Reinforcing Financial Literacy in Day-to-Day Banking



• Financial education needs to drive business or it will not be a priority

– Staff need to see value– Field staff follow up on leads– Customers put education into action

• Set goals for the business objectives– Open X accounts– Increase frequency of deposits– Increase # of transactions per customer– Increase # of accounts per customer

• Measure and monitor– Against targets– Implementation of program e.g. follow-ups by sales team, conversion

rate

For the InstitutionFor the Institution


Case Study: SEWA Bank, Project Samruddhi

Insight Opportunity

Customers have goals, but need help prioritizing and creating a plan to achieve them

Lengthy classroom training sessions are difficult for customers to attend and yield low recall of concepts

Illiterate customers need help checking basic account information, like balance or interest earned

Saathis cannot always easily answer questions that require calculation, like interest earned on recurring accounts

Help customers articulate their goals, and build a plan around their aspirations.

Re-think FE training: replace long classroom sessions with concrete, practical information in the field

Visual tutorial on how to read a passbook; reinforce with take-home reference and in-branch video

Tools for saathis that help de-mystify areas of confusion

Objective: Identify and test ways to embed financial education into regular interactions with field officers (“saathis”) to:

• Build basic customer financial capability• Increase active customer account participation & use


Re-focusing Accounts Around Goals

Updated passbook covers explicitly focus recurring accounts around the five most popular customer goals, to help customers link their savings to concrete goals

Rainy Day (“Chase Your

Worries Away”)HousingHousingWeddingsWeddingsGoldGold PensionPension

Client PhotoClient Photo


Field Agent Applications

New PDA applications help SEWA’s Bank Saathis deliver concrete, practical information and advice in the field.

Recurring Account

Calculator: offers a built-in plan by helping her choose the right account

Recurring Account

Calculator: offers a built-in plan by helping her choose the right account

Impact of a missed

deposit*: shows how missed

deposit today = reduced lump

sum later

Impact of a missed

deposit*: shows how missed

deposit today = reduced lump

sum later

“Smart” prompts for saathis: help saathis keep

customers on track to achieve

their plans

“Smart” prompts for saathis: help saathis keep

customers on track to achieve

their plans

*visual graph coming!


Key Messages


Conclusion

During today’s session we have…

Part I: Designing Products for Savings– Explored design considerations in developing savings products

for the unbanked, especially women– Assessed institutional readiness for implementing new

products effectively– Discussed a case study of a product development process

(Hasal MFB)

Part II: Financial Literacy for Savings Mobilization– Developed practical techniques for implementing financial

literacy in your savings program– Discussed how to ensure that financial education adds value to

the customer and to your business– Explored examples of ways to reinforce financial literacy in

day-to-day operations


Women’s World Banking

www.womensworldbanking.org

women’s world banking ® women’s world banking workshop: savings mobilization and financial...

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