Microfinance

Why Work With Us?

Key themes and clients: Microfinance (1/2)
Strategic Business Plan and Financial Projections
We have supported financial institutions strategise interventions including their transformation
planning through the strategic planning exercise and support it through development of financial
projections and tactical plans. Key institutions supported include: Bina Artha (Indonesia), BPR
Artha Guna Sejahtera (Indonesia), Shakti Foundation (Bangladesh), CoopBank (Vietnam), Credit
Access Grameen (India), Arohan (India), HNB Grameen Microfinance Instituion (Sri Lanka), CRDB
Microfinance Service Company (Tanzania), Faulu, Opportunity, Musoni and Equity Bank (Kenya);
BRAC (Uganda); M-Finance (Zambia); Proximity Finance (Myanmar); Koperasi Mitra Dhuafa
(KOMIDA) (Indonesia); RaboBank Foundation and Cordaid (Indonesia)

Market Insights and Financial Solutions Design

We develop deep-dive insights of the market through use of Market Insights for Innovation and
Design (MI4ID) approach. The insights are then used to design market-led financial products,
including credit, savings, and insurance products for diverse clientele and segments. Key projects
include: Micro-insurance for Britam, Youth savings & card-based product for Postbank, Product
refinement for Equity Bank, Family Bank, Faulu, Unaitas (Kenya); Wisdom (Ethiopia); Sinapi Aba
(Ghana); SIDBI Techno Inclusion Fund (India); NetHope in collaboration with AMARTA II (Indonesia)

Implementation Support
We support financial institutions optimise delivery channels, systems and processes. We develop a
comprehensive risk assessment and mitigation plan, train the staff to deliver products effectively and
efficiently, develop effective policies and procedures, and develop marketing plan based on the
strategy. Some of the institutions supported include: Ministry of Social Affairs, Supported by the Bill &
Melinda Gates Foundation (Indonesia); Faulu, Juhudi Kilimo (Kenya); Access Bank (Tanzania), Housing
Finance (Uganda); OIB (Malawi); M-Finance (Zambia); Juhudi Kilimo (Kenya), Sonata (India); SAFIRA
(Indonesia)

2
 Why Work With Us?
Key themes and clients: Microfinance (2/2)
Digital Financial Services for MFIs and Banks
We help microfinance institutions to deploy digital financial services. MSC has prepared a Digital
Transformation of MFI toolkit with support from the IFC. With support from MetLife Foundation, we have
implemented a large two-country Digital Microfinance Project in Bangladesh and Vietnam. MSC has been
providing technical assistance in product and process innovation to MFIs such as Shakti Foundation and BURO
in Bangladesh to facilitate their transition to a tech platform, in order to better serve their clients and reduce
costs, funded by MetLife Foundation. It has undertaken activities like baseline assessment for DFS roll-out,
strategic planning, pilot preparation, technology vendor selection, and product roll- out. We are helping MFIL,
an MFI in Bangladesh to deploy digital technology to make their operations more customer centric and
efficient. With support from Rabobank Foundation we strengthened close to 15 MFI’s in Indonesia, so that in
future they could provide quality services in a sustainable manner to their client base.
Responsible Finance and Social Performance Management
MSC has a Social Performance Management toolkit to help financial institutions to embed social performance
into their core systems and procedures. We have conducted SPM for 8 Opportunity International partners,
client protection assessments for four Grameen Foundation partners, and implemented SPMIP project in India,
Sri Lanka, Cambodia and Bangladesh. Also, clients such as HKL an MFI in Cambodia commissioned MSC to
develop its Social Outcome Dashboard to implement, monitor and report social performance to its board and
other key stakeholders.

Institutional Assessment & Due Diligence

We have done institutional assessment of more than 40 MFIs in India. Some notable microfinance institutions
where we conducted such assessments include Cashpor Micro Credit, ESAF, RGVN, Sahayta Microfinance, and
Sahyog Microfinance. We also do due diligence of MFIs for donors and investors in Asia and Africa. Some
recent examples include due diligence of Cashpor Micro Credit, Samhita Microfinance, RGVN, Adhikar
Microfinance, Sambandh Microfinance and Shikhar Microfinance in India; KOMIDA and Bina Artha in Indonesia;
and evaluation of Zimbabwe Wholesale Microfinance Facility.

3
 The challenge Our impact
Business process With growing competition, organizations need to explore all possibilities to
re-engineering increase efficiency and reduce risk by addressing operational gaps in
existing processes that hinder efforts to achieve both operational and
Increased process
efficiency for efficient
financial viability. Operational gaps in processes lead to inefficiency and utilization of resources
Brand new ways to enhanced risk, which adversely affect operational and financial viability.
Cost and risk avoidance
optimize processes The opportunity or reductions
and reduce risk Organizations across the globe are undertaking process innovation in their
Shorter turn-around-time
operations, structure, and management to excel in today’s highly
for service delivery and
competitive environment.
increased customer
satisfaction
We offer Turn around time reduced
from 4 weeks to 6 days at
Urwego Opportunity Bank

Improved operational and

financial viability of
products
Global Technical Superior industry Proven expertise >250,000 person-days
experience in advisory understanding of in transforming saved per year at Equity
business support in the cross- operating Bank, Kenya
process re- identification of functional models to meet
We help our clients
engineering for risks and integration points organizational
digital financial suggesting risk that may be objectives achieve the “triple bottom-
services with a mitigation fragmenting line” comprising large-
wide variety of measures processes and scale outreach, viability,
clients hampering and client transformation.
performance
Clients and partners
and many more...
 The challenge and opportunity Market Our
Banking savings Formal financial service providers (FSPs) need
analysis
impact
Strategies
groups better understanding of savings groups (SGs) to
develop viable business models and products to Digital Financia
development and
pilot test
serve them. Wide adoption of Digital Financial linkage l
strategy literacy implementation
Services (DFS) and related digital channels,
DFS solutions that provide FSPs for opportunities to serve SGs and
support to facilitate
300 SGs linked to
drive business model their members.
formal services
viability Do you have such questions? through digital
financial services in

?
How can formal financial service providers better serve SGs Uganda.
A study for the Mastercard
sustainably?
What are the successful SG linkage business models? Foundation (MCF) on
What are the best practices of SG linkages? opportunities to expand
effects of SGs towards
financial inclusion. See a
MSC offers Research Brief
https://bit.ly/2IXIAjB
Strategy design: Implementation support:
MSC supports partners to MSC works with partners to design, test and
design strategies to serve implement services that promote access to Developed SG linkage
SGs. Our team of specialists: formal financial services by savings groups. toolkits and business
Review SGs, provide These include: case models to
insights and Guiding FSP managers to make strategic provide guidance to
recommendations ‘go’ or ‘no-go’ decisions about working banks, MFIs, and
Map out the digitization with SGs NGOs aiming to serve
process SGs with formal
Business case preparations and pilot-
financial services
Identify key issues and testing
recommend opportunities Building the capacity of partners,
including SG facilitating NGOs, banks and
MFIs
Clients and partners Designing marketing and communications
material to create awareness among SGs
and many more...
 The project context Outcomes and impact
Digital
Shakti Foundation for Disadvantaged Women (SFDW) was looking for ways to
transformation of manage risks arising due to cash-intensive operations and diversify product
and services. In this context, MetLife Foundation commissioned MSC to
MFIs support SFDW to undertake digital transformation to address the strategic
challenges identified above. The new voluntary savings
Our product is available across
Digital transformation of solution 420 branches of SFDW
MSC provided technical assistance to Shakti introduce the following services:
Shakti Foundation for
Disadvantaged Women in
Bangladesh Loan disbursement and Savings deposit and
repayment through withdrawal through agents
agents

As on December 31, 2018

Digital field application to Provision of agent banking 235,362 savings accounts
source MSME loans services through its have been opened
branches

MSC
Support Improved internal control
and reduced risk of fraud
Strategy Operations Training Pilot

About the partner

Shakti Foundation for Disadvantaged Women (SFDW) is a fast
growing, large, deposit-taking microfinance institution (MFI) head Cashless loan
quartered in Dhaka, Bangladesh. SFDW offers a bouquet of credit disbursement across all the
and savings products and services to low-income women. pilot SME branches and two
JLG branches
 Payments
The opportunity
Digital credit Digital credit has been growing rapidly and
democratizes credit with instant, automated, and
A new world of remote processes. Remittances Sales records
It meets short-term liquidity needs and some
opportunities enterprise needs of the low- and middle-income (LMI)
populations.
Transactio Agricultural
Data-driven, digital credit provides unparalleled n history inputs and
opportunities to increase outreach for those who have data
adequate digital footprints. Potential consumers Digital
Credit footprint Personal and
comprise MSME and consumer credit lenders, including
The challenge
banks, NBFCs, and MFIs. history collateral details

Digital credit providers face concerns around

unsuitable products, unaffordable pricing,
irresponsible practices, over-indebtedness, and Mobile datasets
lack transparency.

MSC offers Our impact

Created unprecedented
awareness and understanding
of digital consumer credit in
Africa, that drove providers to
20 years of Deep Big data Our signature redesign products and
work on loan understanding of analytics on HCD and ushered regulatory and policy
products for credit-scoring, CBS and CRB behavioral changes
the LMI and risk assessment, records market research Designed digital credit
MSME markets and management approach to products for agriculture and
underpin product MSMEs
design—MI4ID
Clients and partners Developing a digital credit lab
with key partners
and many more...
Youth financial The project context
• Opportunity International United Kingdom (OIUK) contracted MSC
Outcomes and impact
• Of the youth engaged as part of
product to support Opportunity Bank Uganda Limited (OBUL) to develop
and design a savings product with theprimary objective to
the project, 86% reported that
they save with the Village
development encourage youth savings, increase deposit mobilization, and
develop a credit product that is refined from existing partner
Savings and Loan Association
(VSLA) model. They find banks
to be located too far away and
products.
believe that banks cater solely
Financing rural youth living to the educated and more
• At the time of writing, the project was ongoing and targeted youth economically capable people.
in rural Uganda farmers from rural areas, specifically the villages in Mityana OBUL therefore had to bring its
Ourdistrict.
solution services closer to the youth
through agent and mobile
Value levers banking channels.

Value proposition to the Business case for OBUL to • The youth in Uganda lack
youth farmers offer youth financial traditional securities. OBUL
products should therefore allow group
gurantorship in place of
Institutional readiness Stakeholder and user traditional collateral like land
assessment for OBUL needs and preferences titles.

• Among the respondents, 98%

are involved in the production
stage of the various crop value
chains. However, they wish to
MSC’s support go beyond production. OBUL
Research Prototype Recommendatio should therefore support them
in this.
development ns
• At the time of writing, the
products were scheduled to be
Clients piloted in Mityana District
where 4,050 youth (average
age 24, 36% female) will
receive help to save through
matched savings and 400
youth will receive a loan (either
group or individual).
Livelihood The project context Outcomes and impact
The project had the following
Shakti Foundation for Disadvantaged Women (SFDW) sought ways to
restoration loan design and implement a livelihood restoration loan product for young key objectives:
entrepreneurs affected by COVID-19. The product would be the part
(LRL) product for of a support package from Palli Karma-Sahayak Foundation (PKSF),
1. Design product concept
and processes: Develop a
young Bangladesh. MetLife Foundation commissioned MSC to support SFDW
to develop and implement the product, which would work toward
livelihood restoration loan
product for SFDW keeping in
entrepreneurs in restoring the livelihoods for young entrepreneurs in Bangladesh. mind its institutional
capabilities and team
Bangladesh Our solution strengths. Once the product
is designed, processes to be
At the time of writing, this was an ongoing project and MSC would developed on marketing,
provide technical assistance to Shakti in following areas: client onboarding and
application, underwriting or
sanctioning, disbursement,
and delinquency
management, etc.
2. Design risk framework:
Develop risk mitigation tools
Institutional Landscape mapping Product Development of to successfully launch and
assessment development policies and roll-out the product with an
processes overall objective to keep PAR
less than 0.5%.
3. Support the change
management process:
Identify changes to be made
in the loan origination
system and staff capacities,
Support pilot and Conducting Development of risk among other areas, and
roll-out training of trainers management tools
support the HR and ICT
teams in the change
Clients management process.
4. Training of trainers:
Training of the loan officers in
a training-of-trainers format.
5. Pilot test and roll-out:
Help SFDW in pilot test and
conduct phased roll-out.
Designing a The project context Outcomes and impact
YouthSave, a consortium project in collaboration with Save the Developed a savings
savings product Children, with funding from the Mastercard Foundation commissioned product based on the
MSC to conduct a market research exercise. Its objectives were needs and preferences of
for youthof a savings
Development twofold. First, it would develop a suitable savings product prototype youth
product for poor youth in for low-income youth between 12-18 years in Nepal. Second, the
The key feature of the
exercise would understand content and delivery preferences for
urban and rural accompanying mechanisms and interventions that can increase the
product were:
communities across Nepal levels of financial capability for youth (that is, their ability to manage • A compulsory deposit (CD)
their financial lives wisely. of a minimum of NPR 30 at
Our solution least once in a month with
Guided by MSC’s Market Insights for Innovation and Design (MI4ID) no upper limits (in
approach, we supported YouthSave across the following aspects: multiples of NPR 10 per
month or fortnight)
• Clients can also deposit
any amount over and
above the compulsory
portion
Research design Research Product strategy Development of • Clients can deposit more
coordination and development product prototype than once in a month in
data analysis
the branch, though each
additional deposit should
be at least NPR 500.
Based on the product
prototype, Bank of
Workshop with Training of trainers Kathmandu (BoK) launched
consortium partners to the “BoK Chetanshil Yuwa
design the phased roll- Bachat Yojana” (BoK
out
Clients Conscientious Youth’s
Savings Plan) across the
bank’s 43 branches in April
2012. Within a year of
launch, it had successfully
created 5,207 youth
Developing The project context Outcomes and impact
Equity Bank sought ways to increase the interest of Kenyan youth in
youth-focused savings products and enable access to them. It worked with MSC to
Equity Bank piloted five new
financial products in Kenya
conduct a market research study to understand the financial needs of
savings products clients and to develop a set of prototypes for financial products for the
over two years:
1. Equity Jijenge: Customer-
potential youth clientele.
for Our solution
determined contractual
savings product
Equity Bank in MSC supported Equity Bank by using its
Market Insights for Innovation and Design (MI4ID) approach to cover the
2. Equity education
program: Customer-
Kenya following aspects: determined savings for
school fees
3. Equity super junior:
Savings account that
teaches kids the value of
money and savings
4. Equity student
achievers’ account:
Similar to a normal savings
MSC’s account
suppor
5. Equity youth: A regular
t savings account limited to
one withdrawal for the
quarter.

Since its launch, the bank

expanded its customer base
comprising youth from 13% at
the end of 2012 to 47% by the
end of 2019.
Clients
The mean age of Equity’s
customer is 24. Also, through
its digital transformation, the
bank has enabled youth to
Source: Making Cents International analysis transact by themselves on
digital mediums.
 The project context Outcomes and impact
Technology In order to accelerate growth and diversify products and services, MFIL (a

acquisition mid-sized MFI) was looking to acquire new IT system that is capable of
delivering the business outcomes that the board and management
MFIL envisions that with the
new CBS, it will be able to:
envisioned for the organization. MFIL therefore commissioned MSC to assess
support their existing IT system and assist them to acquire a Core Banking System
(CBS) that is aligned to their business requirement.
Our solution T
Digital transformation Reduce operational
through acquisition of e cost
appropriate technology Rapid Develop Evaluate Recommend xt
solutions assessment of ‘Request for proposals new IT
IT needs Proposal’ from CBS system
vendors
Improve efficiency

Responsiveness to Data management

Assessment Framework
requirement and security

Experience Flexibility
Better identify and
mitigate risk
Cost Speed to go live

Technical
experience
Offer a wider range
of credit, savings
and third-party
About the partner products.
Myanmar Financial International Limited (MFIL) is a fast
growing, mid-sized, deposit-taking microfinance institution
(MFI) head quartered in Yangon, Myanmar. MFIL offers a
bouquet of credit and savings products to low income
customers and MSMEs.
 The challenge and opportunity MSC offers
Optimizing Financial institutions struggle to achieve financial viability as they offer new An articulated approach to

financial and products, expand to new geographies, or modify their operational models. An
understanding of their overall cost-structures and income flows helps
costing financial services
that focuses on the
financial institutions optimize the operational and financial costs to enhance
operational costs
Advisory that enhances their financial viability.
Strategic context of costing and pricing
assessment of cost
centers, determination of
their profitability or
financial viability Product-mix and new
product
contribution, explicit and
Product design and latent costs, and
development
implementation development of the right
Customer cost mix from business
Operation relationship planning and investment
al and Customer service management perspectives.
financial
perspecti Staff management Operational
ve efficiency
and incentives Development of the right
pricing strategy based on
Budgeting,
Financial viability accounting, and
the three-step method
financial returns anchored on establishing
the full costs, comparisons
Our impact with the peers and within
Our costing and pricing exercises helped financial institutions in Asia the industry, and the
and Africa to: perceived value of the
product for the users.
Identify and eliminate loss-making products or units that had a significant
and immediate impact on the institutional viability;
Develop and implement a framework for automation of costing systems for Training and capacity-
a real-time analytical update; building of management
Design and implement more effective staff incentive schemes and operations team to
Re-focus product marketing activities on more profitable products institutionalize costing
after the costing exercises. and pricing within product
Develop the capacity to perform costing and pricing design and delivery,
Clients and partners customer service,
marketing, and staff
incentives design.
and many more...
 The challenge
Technical Several FinTechs collect data on different fronts but lack the skill and expertise to use the collected data to
assistance to inform their business decisions.

FinTechs The opportunity

under the Develop a data strategy and provide technical assistance to FinTechs to help them make informed business
decisions in their current operations and during scale-up in different geographies.

JPMC Our engagement Outcomes and

Financial MSC developed machine learning models for various business operations impact
The findings enabled
and also helped start-ups develop best practices for data collection. MSC a FinTech to optimize
Inclusion Lab analyzed existing organizational data and developed strategies that
allow start-ups to refine their recruitment practices, identify and profile
its data collection,
with a reduction in
customers, develop credit scoring models, etc. the number of
variables collected
The details of some of our work are as follows:
from 68 to 13.
1. A data validation exercise to develop credit-scoring models
A FinTech used the
2. Use of unsupervised learning methods to identify customer risk based insights and
on their past payment patterns recommendations to
3. Development of classification systems to guide organizations in their enhance its
recruitment practices recruitment process.

4. Development of recommendation systems using association rules to

help organizations create product baskets of products more likely to
sell together

Clients and partners

Promotion of The project context Outcomes and impact
Michael and Susan Dell Foundation (MSDF) commissioned MSC to promote
Urban Micro and urban micro and small enterprises in India through technical assistance to
non-bank financial institutions. As part of the engagement, MSC supported
Small Enterprises Annapurna, an NBFC and one of MSDF’s Action Research Partners (ARPs), to
create a compelling value proposition for its Microenterprise Lending (MEL)
Developed an enterprise
finance loan product, based
product and enhance operational excellence in service delivery. on the research findings
Promotion of urban micro
 Prepared a strategic plan for
and small enterprises Our solution the project
through technical
 Developed the operational
assistance to an NBFC in Segmentation of the Process design for policies and processes for
India urban micro and small delivery of the loan delivery of the loan product to
enterprises market products the potential clients, including
operational manual and
process maps. AMPL achieved
operational efficiency, and
Training curriculum reduced the turn-around time
Product Design based for middle to under 10 days
on research findings management and
frontline staff
 Developed institutional
capacity by developing the
Product marketing
Strategy formulation training curriculum and
program that delivering a training session
for MEL business embeds financial for the staff on products,
literacy processes, delivery, policies,
and systems.
About the partner
Annapurna Finance Pvt. Ltd (AFPL) was established
in 2009, and is now one of the top ten NBFC-MFIs in
the country. It has its roots as a part of not-for-profit  Conducted ongoing
entity, Peoples Forum, an NGO which worked for the monitoring of the pilot and
development and welfare of unserved sections of provided recommendations
the society. for improvement.
 The project context
Enhancing Outcomes and impact
To provide technical assistance by setting up operational, financial, and
capacity in human resource systems, and MIS at Bina Artha, a microfinance
institution. This was done to scale up their microfinance operations.
 Market research exercise to
discover the product
microfinance attributes
 Designed processes for the
Improving the technical Our solution operations (client acquisition,
Process loan appraisal & delivery,
capabilities of a Mapping recollection process, and
and Risk
microfinance institution Analysis
delinquency management)

Market
Financial  Designed systems for
accounting back-office management
research
for MFIs
and branch management

MSC  Designed financial and

accounts management
offere systems (maintenance of
d books of accounts;
Financial information flow from
Manageme Human
nt and Resource branches and within the
Ratio Manageme head office; bank accounts
Analysis for nt management)
MFIs  Designed human
Pilot testing resource management
using
MSC’s MFI systems (recruitment and
Out of a training processes,
Box toolkit compensation and other
human resource policies)
About the partner
Bina Artha, a start-up microfinance institution in
Indonesia, is registered as a venture capital firm.  Developed a customized
It offers working capital through a modified MIS for the organization
version of the traditional microfinance Grameen
group methodology exclusively to women who do
not have or have only partial access to the formal
financial sector.
16 All rights reserved. This document is proprietary and confidential.
 The project context Outcomes
Emerging MFIs In response to the skewed distribution of microfinance in India, The RBS

Programme Foundation India (RBS-FI) and Cordaid launched the microfinance technical
assistance program in 2006. The program focused on building robust and
creditworthy MFIs in the underserved regions of the country.
Scaling up operations to
expand outreach to
Our solution Capacity building of 39 MFIs
unbanked communities MSC provided technical assistance to Shakti introduce the following in 13 states of India and
services: have an impact on the lives of
Financial Accounting for MFIs more than 100,000 poor
families

Financial Management and

Ratio Analysis for MFIs

Key
Process mapping/re- Helped more than seven
Aspect
s engineering MFIs transform into
appropriate legal entities

Human Resource
Management

Risk management
Training/mentoring of nine
About the partner independent microfinance
The Royal Bank of Scotland (RBS) is a large international consultants, who have
banking and financial services company. Headquartered
received 33
in Edinburgh, RBS serves over 24 million customers
worldwide. As part of its sustainability mandate, RBS certifications across
believes in inclusive growth and demonstrates it by nine technical areas
supporting local communities in the countries in which it
operates.
17 All rights reserved. This document is proprietary and confidential.
18