1. EU/ACP Microfinance Program Microfinance Peer Learning Event Experience in Development of Savings Services Peter Mukwana October 1 – 3, 2008 Brussels - Belgium MicroSave Market-led solutions for financial services

2. Why Develop Savings Products? Respond to client needs and preferences Operational & financial sustainability Deepen and broaden outreach/growth Help clients manage risk and vulnerability Raise new sources of capital Retain good clients/reduce drop-out rates

3. Product Development Process Overview Qualitative Research: FGD/PRA Research Issue Qualitative Research Plan Understanding clients needs Product Ready for Pilot-test Quantitative Research: Prototype Testing Concept Development Refine the Concept into a Prototype Testing the Product Prototype Costing & Pricing Risk Analysis & Process Mapping

4. Key Innovations in Development of Savings Product MFIs have generally two types of savings products namely: Compulsory savings and Voluntary savings accounts (Easy Access a/c at Uganda Finance Trust, Quick a/c at Tanzania Postal Bank). Providing Value Added Services (VAS) Life/health insurance, unlimited withdrawals, free ATM cards, free statements Electronic Banking /Technology-based financial services Branchless, Mobile phone, POS, ATMs

5. Key Innovations in Development of Savings Product 2 Mobile banking – Equity Bank (Kenya) A concept that the bank used to reach the remote areas DFID supported it by provision of 4WD Vehicles Mobile Vans visit remote areas say 3 times a week Vehicles were fitted with secure safe and escorted by police Van has communication link with host branch database Laptop was used to process transactions

6. The Challenges for Developing and Marketing Savings Products 1 Regulation – restrict provision of open access KYC challenges - e.g. physical address, passports and National IDs requirements Technology costs - initial capital required is huge Culture change – especially for MFIs that have all along been Credit-led Buy-in across the institution

7. The Challenges for Developing and Marketing Savings Products 4 Challenges for Marketing Savings Products Poor product knowledge. Misunderstanding or misinterpretation of savings products as being linked to loan products. Inconsistent marketing messages on products / services Poor customer service (where there has been an effort, institutionalizing it is a challenge) Building strong corporate brands that inspire confidence from the public

8. Suggested Solutions / Ideas to think about when Developing and Marketing Savings Products Determine the customers value propositions and integrate them in the design (sell benefits) Corporate Branding Competitor analysis Staff training – customer service, product knowledge, processes and procedures Financial Education – focus on clients – product knowledge, etc Pilot test savings to ensure fit with existing institutional structure and infrastructure

9. Experience With Micro-insurance 1 Key Risks Sickness, Accidents, Theft/Robbery and Death Coping Mechanisms Savings, Sale of assets, Relatives / friends, Groups, Formal Insurance, Loans Understanding of Insurance Very low, negative experience, how insurance works What need to be done? Change the negative perception Create linkages with insurance companies Craft Clear Messages Train Staff (MFI) and deliver on the promises

10. Finally … Stay Alive!! MicroSave Market-led solutions for financial services Email: info@MicroSave.orginfo@MicroSave.org Website: http://www.MicroSave.orgMicroSave.org