Trends Group Liability and Individual Liability

Trends on Group Liability and Individual Liability Jennifer Sabianan MABS 2010 RBAP‐MABS Na.onal Roundtable Conference  Hya= Hotel and Casino, Manila  June 2‐3, 2010 

Approaches in Group Lending • Group liability • Center meetings Group Loans: • Typically, auto-step up of amounts Grameen-like • Project-based with loan amount based on future income stream • Individual liability • Regular meetings as point of Group Loans: collection only ASA-like • Contractual savings as Personal deposits

When do you know group lending is facing challenges? “Tapal” System resulting in: * Group tensions/conflicts *May lead to inefficient collection methods and non-friendly consumer protection practices *Strategic default (domino effect) Product Decay Lost of Interest/ Enthusiasm of clients that leads to: *Client drop out *Loss of good clients *Getting new clients becomes harder

What can be done? Be sensitive to the signs of product decay or clients’ loss of interest in the product Regularly listen to client feedback using At least once a year FGDs or survey tools Find out what other financial services clients need New/Additional features of existing New/Other Loan Products product Study what your competitors are doing Products Services

Is transitioning an option for you? Graduate to individual loan product Graduate to transition product under individual liability Remain in group ( same or improved product feature)

Important practices to keep in mind in transitioning * Don’t do transitioning all at once for all group clients - Classify clients according to criteria of repayment performance, number of loan cycles * Observe steps to follow for smooth -Market transitioning Research -Design new/ - Develop - Pilot Test enhance existing transition/ - Evaluate loan product graduation plan - Roll out in stages

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Trends Group Liability and Individual Liability

by MABSIV on Jun 11, 2010

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Trends Group Liability and Individual Liability — Presentation Transcript

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