Building Financial Capabilities and Strengthening Institutions through Customer-Centered Innovations
Time and time again we observed that personal money management skills are crucial for survival of microenterprise, while building up the savings significantly improves the resilience towards economic shocks of the family and helps pursuing the family’s dreams. Thus for years MFC has been working on improving financial health of the low income people.
Today, the behavioral economy research shows, that only very small percentage of behavioral change in terms of money management can be assigned to financial education trainings. The automatization of behavior serves much more the purpose – for example, an micro entrepreneur, who automatically puts aside 1 Euro of its daily revenue, is much more likely to build up her or his saving.
Project Description
MFC partners in the Building Financial Capabilities and Strengthening Institutions through Customer-Centered Innovations project, a partnership between global nonprofit Accion and MetLife Foundation. The project aims to enhance financial customer engagement by building their capabilities. Regional efforts in, Eastern Europe by MFC (being the expert in financial health), and in Latin America and Asia by other partners include designing digital tools and services informed by human-centered design; incorporating behavioral principles that spur usage and empower clients; and enabling financial service providers (FSPs) to effectively leverage and utilize client data for continuous improvement. Ultimately, results should include better service, greater confidence, and progress toward increased financial capability for underserved consumers. FSPs should experience increased customer loyalty and satisfaction, fewer customer errors, and higher usage and balances.
Project Goals
In this action research project, MFC partners with Accion create a digital tool (mobile phone application or responsive web site), that will support microfinance clients changing their financial behavior. The mobile solution will be a mean for financial providers to interact with their clients.
The project seeks to develop and test practical applications to assist consumers to better understand their financial health status and offer behaviorally-informed nudges, reminders and suggestions on how to improve it. Additionally, the project will work to optimize and embed these applications into the practises of financial institutions and NGOs carrying out financial education work to increase their programs’ cost-effectiveness and create knowledge about the financial health of their clientele that can be used to tailor and refine products to address the needs of specific client groups.
The project commenced on September 1, 2017 and will last till June 30, 2020. The project activities involves MFC members and partners in Poland, Romania, Armenia and Serbia, as well as involves MFIs from other European and Central Asia countries.
Project Partners
Lead partner: Center for Financial Inclusion at Accion
Project partners taking part in first phase:
Poland: Rural Development Foundation, Foundation for Innovation and Knowledge , Citizens Advices Bureau
Armenia: Finca
Romania: good.bee Credit
Serbia: Opportunity Bank
At the end of 2018 MFC created advisory group consisting of several MFC members. The role of the advisory group is to provide feedback, insights and suggestions during the digital tool development process to ensure that the digital tool will be relevant and applicable to the members across the region.
The following institutions are contributing to the advisory group work:
Adie, France
Crystal, Georgia
FINCA, Armenia
good.bee Credit, Romania
KMF, Kazakhstan
NOA, Albania
Join the Project
If you would like to know more or join the project, please contact us: microfinance{@}mfc.org.pl.
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