Successful Savings Mobilization

SUCCESSFUL SAVINGS MOBILIZATION Julie Peachy Grameen FoundaAon 2011 RBAP-‐MABS Regional Roundtable Conference Hya= Hotel & Casino, Manila November 9, 2011

Successful SavingsMobilization Julie Peachey Microsavings Initiative Project Manager g j g Grameen Foundation MABS Roundtable, Manila , November 9, 2011 1

Agenda• O Overview of GF/CARD B k S i i f Bank Savings M bili ti Mobilization project• Keys to successful savings mobilization: – Holistic Approach to Product Development – Data analytics – Human Capital – Business model• CARD Bank savings pilot results B k i il t lt• Conclusion 2

Grameen Foundation s Microsavings Initiative Foundation’s A three year project aimed to reach 1.45 1 45 million new savers in: (Philippines) ( hili i ) (India) ( di ) (Ethiopia) ( hi i ) Our holistic approach helps offer secure, convenient poverty focused savings programs, while building sound financial and institutional practices that transform MFIs from credit led to client focused demand driven financial institutions focused, Funded by the Bill & Melinda Gates Foundation

Our approach to microsavings implementation1. Market1 M k research & h Product Design2. Marketing & financial literacy3. Enabling field based transactions through alternative delivery channels4. Building institutional capacity

CARD Bank Overview • CARD Bank (1997) is a microfinance oriented rural bank (part of CARD MRI; • Savings Products ghlightsCA Bank Profile 1986) • Main product = Compulsory • Largest MFI (together with CARD NGO) account with option to save more Project Hig in the Philippines when measured by • Regular savings and time deposit number of active borrowers, gross loan • Challenges: portfolio, and total assets; 1600 • Development of marketing ARD employees function and long term strategic g g • Organization owned and overseen by marketing plans members; offering voluntary savings since 1997; moved from group to • Delivery Model and Business Case individual lending in 2003 • Implementation of new core • Current outreach for savings: banking system, ATM technologies system • 45 branches • Change Management • 242 Micro Banking Offices (MBO) • 500k active voluntary savers

Holistic Approach to Product Development • Example of product development life cycle New Product for savings Market Roll t P R ll out Prep; Roll out Segmentation Product Institutional • Incorporating Marketing & PPI Promotion Assessment institutional capacity Financial Literacy across: Customer Segmentation S t ti – IT and Targeting Evaluation Market Data – Training of Pilot Research Analytics Costing & – HR and Change Regulations Pricing Project Management HR IT Management – Finance – Costing and Treasury Develop Pilot Test Product Management Preparation; Concept Financial Projections – Internal Controls,Training Internal Audit l di Finance – Marketing Process Field Test Mapping Internal – Financial Literacy and Adjust Costing & g Pricing Controls – Social Treasury Mgmt Performance Management 6

Market Research: Accessibility is often valued more than any other savings p product attribute10 Important Attributes of S i 0 ib f Savings Product dMay 2010 CARD Bank Market Research

CARD Bank Savings Delivery Model Pilot Savings Product Matapat • Delivery Channels offering savings services: – Center meetings and MBOspilot branches only – Deposit collection by Savings Savings Account Associates and in center collection Associates Officer sheet – Withdrawal through ATMs i hd l h h – Bank branches Existing Members • Dedicated Customer Service General Public Associate based in Bank branch

CARD Pilot Test Findings • Primarily for the education of children and emergency needs • Extra funds for daily needs and utilitiesWhy Save?* Save? • Additional business capital • Separate savings aside from Compulsory Account (for members) • Convenient withdrawal transactions Why • Deposit Collection (SA and SMS Hub) • Low maintaining balance Matapat? • Privacy of Savings compared to Compulsory Account (for members) • 43% have not yet used their savings What is • Savings were used mostly for additional business capital and unexpected eventssavings used • Other usage includes education, daily needs, for? f ? utility and debt payments. * Same reasons as given in initial market research

Data Analytics: The poor can save Correlation betweenAt CARD Bank, poverty scorewe did not find and savinga correlation balances = .20betweenpoverty level*and savings Exchange rate = 43.1 PHP/USDbalance N 84,735 N= 84 735 (top 1% removed due to outliers) More poor Less poor *Using GF’s Progress out of Poverty Index tool

The Role of Human Capital Mgmt Structure and Job Descriptions Rewards & Skills Gap Incentives Analysis Supporting Mechanisms M h i Performance Recruitment Targets and Selection Learning and g Development 11

Business Model• Costing exercise completed in June 2010 and again June 2011 including results from the g g pilot• Actual costing of all 17 products (savings and loan) using 6 months worth of d l ) i h h f data• Initial projections done for the pilot d f h il product – Matapat• Scenarios for full time or part time Account Officers for savings. 12

4,500 PHP 8,000,000 Matapat Product # of accounts and savings volume Human Capital Management PHP 7,519,188 January 2011 to September 2011 source Datamart 4,1934,000 PHP 7,000,0003,500 Structure and PHP 6,000,000 Job PHP 5,800,097 Descriptions PHP 5,573,122 PHP 5,024,7403,000 PHP 5,103,862 2,977 PHP 5,000,000 Rewards & Skills Gap Incentives Analysis 2,5902,500 PHP 4,000,000 Supporting Matapat accounts Mechanisms PHP 3 148 229 3,148,229 2,1582,000 PHP 3,000,000 Matapat Volume PHP 2,745,749 PHP 2,520,054 1,724 Performance Recruitment1,500 Targets and Selection PHP 2,000,000 PHP 1,852,7121,000 Learning and PHP 1,000,000 931 Development 799 641 721 500 PHP Jan 2011 Feb Mar Apr May Jun Jul Aug Sep 2011 13

Conclusion• Effective Savings Mobilization requires involvement of the entire organization f h• Special focus on the following is key: – Disciplined product development process – Data Analytics… understand your customers – Human Capital Mgmt practices to effect Change g – Business case…. understand your costs 14

Thank you! 15

CASHPOR Business Model Overview • CASHPOR will act as the BC agent to ICICI Bank • Eko Technologies will provide the technology solution • Customer owned mobile handsets along with CASHPOR agents to6 pilot branches only perform transactions SCSP Located at CM • Loan business uses Loan Officer, the branch (CSP) Mobile based application from ATOM Technology. • CASHPOR Delivery Channels are: – the branch for new customers that are not CASHPOR loan clients Non Clients Existing Members – Center Meetings for existing CASHPOR loan clients

Cashpor India:The poor demand formal savings Learn more at www.grameenfoundation.org

Successful Savings Mobilization

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