By Ommara Raza Ali
Since its founding in 1996, Kashf Foundation has become Pakistan’s premier women-focused microfinance institution (MFI). We have a network of 183 branches and 27 service centers across 41 districts with 2,083 employees reaching more than 250,000 clients. Our gross outstanding portfolio is USD 4.513 million rupees and we also offer insurance: we currently have 592,473 health insurance policy holders and 499,982 life insurance policy holders. Kashf was also the first Pakistani MFI to be “Client Protection Certified” by the Smart Campaign. We continue to be pioneers in this field, offering a variety of financial products that answer the needs of our clients while ensuring longevity and sustainability of the business. How do we do it? The answer is deceptively simple: it’s all about evidence-based decision making. Making it happen, on the other hand, is demandingly complex.
Understanding clients’ needs has been at the heart of Kashf’s operations since the very beginning. The first two years were dedicated to understanding the market and the needs of women in peri-urban and urban settings. This research went far to dispel myths that women don’t work, don’t understand business management, don’t know how to utilize loans and aren’t able to work as loan officers. The insights gleaned from these early years established several core principles of our operations:
- standardized products, systems and policies;
- simplified procedures and reporting requirements;
- clear cut financial performance indicators and
- a distinct focus on client satisfaction.
This last point has been especially crucial to our success: by establishing a client feedback system that allows us to incorporate the “voice of the client” in all aspects of the organization’s business operations, products and services, we are able to offer customers what they want, resulting in more sales, increased client loyalty and higher revenue.
Setting up the R&D Department
Despite budget constraints, Kashf’s leadership was committed to knowing our customer better and offering customer-centric products. Thus, the organization established a research department in 2000 with just two analysts and the help of several interns and volunteers from local universities. The team was tasked not just with conducting the research but also convincing all their colleagues that research was an essential ingredient to the organization’s success. But the proof is in the pudding, as the expression goes. After just a couple of years, what we learned from the research had already translated to concrete recommendations that really responded to what clients felt and needed. For example, we removed screening for outstanding repeat clients because in-depth interviews with these clients revealed that they wanted special benefits that privileged them as loyal clients to the organization. Surveys with clients also help us better understand business conditions on the ground and adjust our products accordingly: current rates of inflation had drastically increased the cost of raw materials for clients and they resorted to multiple borrowing in order to cope. We increased the upper limit to microenterprise loan to respond to this reality.
Innovation from insight: our work with Women’s World Banking
Because of our proactive approach in “listening to the voice of clients,” Kashf became the first MFI in Pakistan to offer a commitment savings product catering to the needs of low-income women. We partnered with Women’s World Banking in 2007 to help us understand and develop the kind of savings product low-income Pakistani women want and need. Through the research, we uncovered that clients wanted access to formal savings yes, but specifically, one that ensured confidentiality, flexibility to withdraw, security and convenience. Within a year of pilot testing, 6,175 accounts were opened.
The experience and feedback from this product also enabled Kashf to realize that in order to ensure large scale, sustainable outreach, we needed to use the branchless banking model. Based on these findings, Kashf collaborated with UBL Omni (one of the leading branchless banking providers in Pakistan) this year to roll out a specially designed commitment savings product for our clients built on this convenient platform.
The process: gathering “evidence”
First, the institution must understand the product it wishes to offer as a whole and answer the questions: what is the customer buying? Why will the customer pay for the product? And lastly, how will the customer receive or access the product? Next, it is critical to gather as much information as possible about the current market and its target segment through secondary market research, and if able, primary research to confirm the initial market scan. Once a prototype has been designed, it is time to solicit client feedback through focus groups or one-on-one interviews. Some questions to ask include:
- Do the product terms (price, length, repayment schedule, and so on) meet client needs?
- How does the product compare with the existing products being offered in the market to the clients?
- What are the benefits and shortcomings of the current product design?
- How can the product design be improved?
Client feedback can also be received outside a specific research project. For example, Kashf has a special toll-free number clients can call for complaints and/or information while allowing us to assess customer satisfaction. Weekly reports allow Kashf to track the trends of these calls and ensure accountability of responsible persons or departments that are the subject of complaints. Monthly client visits are another source of information about customer satisfaction, needs and issues. Existing community organizations are another available source of customer feedback: the Women Entrepreneurs Council (WEC) has client representatives from each Kashf area and meets on a quarterly basis to articulate feedback and demands of Kashf clients.
Closing the loop
Gathering evidence is only the first step. A robust client-centric approach must have standard operating procedures for receiving and responding to the findings from the research and recommending an action plan to address them.
Here is an example of closing the loop on product development: Based on an in-depth analysis of client needs, Kashf introduced a pilot where female post-dated checks were accepted and they did not have to depend on their male counterparts to provide checks. We took the product prototype to clients and tweaked the product based on their feedback. In this case, we reduced the upfront service charge to increase its appeal and accessibility to clients.
Many client suggestions have translated into better products. For example, Kashf has introduced the start-up loan, catering to the specific investment needs for women-led start-up businesses and uses a special pre-feasibility study report to determine loan amounts and gauge business risks. We have also introduced an Education Finance product which provides access to credit and capacity-building support to low-cost private schools to improve quality of education in the communities. Other suggestions are in the research or pilot phase: Kashf is currently researching the viability of offering sector-specific loans whose terms will reflect cash-flows of different business sectors.
Kashf Foundation has embedded a robust client-centric approach in all aspects of its operations to ensure that there is a consistent focus on the needs of our clients. Our approach to client-centricity is distinctive in the sector because it is part of our institutional culture, product development process, and reporting priorities. This client-centric approach has informed the decisions taken by Kashf to take advantage of market opportunities, address constraints and improve products and services vis-à-vis the competition.
Today, true to its meaning and thanks to the support and trust extended by partners such as Women’s World Banking, Kashf is an organization that has become the means of a ‘miracle’ or a ‘revelation’ for its clients breaking and shattering all the myths and preconceived notions of women. Clients have overcome their destitution by discovering that poverty is assailable through determination and enterprise and that dependence on hand outs and charity is not the only option for sustaining their livelihood.
