Jaime has read that the vision of the MFI where he works is “ To be the leading microfinance company ”. However, he has been able to appreciate that the strategies implemented by the MFI do not point towards the desired future situation and the staff is not aware of the business vision.
It has been able to verify that the strategies are directed more towards the achievement of a goal of placements that has turned the MFI into a leader in microfinance.
It has been noticed that the placement of non-retail loans is encouraged in an open way or in complicit silence, in open competition with multiple banks. For which the MFI is willing to offer interest rates below its equilibrium point and assume greater risks, in order to be "competitive", forgetting that due to its liability structure it cannot compete with banks and does not have analysts specialized in the evaluation of non-retail credits.
On the other hand, he has been able to observe that Credit Analysts find it difficult to place loans to microenterprises, because in the scope of their market, most potential clients are already at the top of their maximum indebtedness or over-indebted; and there is no institutional policy to expand into new markets. In other words, they persist in continuing in a saturated market or on the verge of saturation and, worse still, with the same products, without further innovation.
Also within the staff it is not clear what the direction of the business is, since the only message they receive is to place, place and place.
Situations such as those described are typical of MFIs that have lost their horizon and are trapped in the middle of the credit pyramid, fighting with banks and neglecting their natural market: microcredits. In addition to those caught in the short term, who only seek the "photo" to safeguard the jobs of those responsible.
Given this, the only thing left is to modify the strategy, as many times as necessary, in order to align it with the business vision and align all the staff behind it. Short-term results should not matter, when the right thing is done.
All the actions of the personnel and areas of the organization must be aligned under the same objective. Resources should not be distracted in what does not lead to the desired situation and the products that are structured should be designed based on the customers that it is intended to satisfy.
Likewise, the staff must have the necessary skills for the position, seeking the specialization of Credit Analysts.
And most importantly: stop serving customers that do not correspond to the target segment and expand the market to areas not served.
Jaime has read that the vision of the MFI where he works is “To be the leading microfinance company”. However, he has been able to appreciate that the strategies implemented by the MFI do not point towards the desired future situation and the staff is not aware of the business vision.It has been able to verify that the strategies are directed more towards the achievement of a goal of placements that has turned the MFI into a leader in microfinance.
It has been noticed that the placement of non-retail loans is encouraged in an open way or in complicit silence, in open competition with multiple banks. For which the MFI is willing to offer interest rates below its equilibrium point and assume greater risks, in order to be "competitive", forgetting that due to its liability structure it cannot compete with banks and does not have analysts specialized in the evaluation of non-retail credits.
On the other hand, he has been able to observe that Credit Analysts find it difficult to place loans to microenterprises, because in the scope of their market, most potential clients are already at the top of their maximum indebtedness or over-indebted; and there is no institutional policy to expand into new markets. In other words, they persist in continuing in a saturated market or on the verge of saturation and, worse still, with the same products, without further innovation.
Also within the staff it is not clear what the direction of the business is, since the only message they receive is to place, place and place.
Situations such as those described are typical of MFIs that have lost their horizon and are trapped in the middle of the credit pyramid, fighting with banks and neglecting their natural market: microcredits. In addition to those caught in the short term, who only seek the "photo" to safeguard the jobs of those responsible.
Given this, the only thing left is to modify the strategy, as many times as necessary, in order to align it with the business vision and align all the staff behind it. Short-term results should not matter, when the right thing is done.
All the actions of the personnel and areas of the organization must be aligned under the same objective. Resources should not be distracted on things that do not lead to the desired situation and the products that are structured should be designed based on the customers to be satisfied.
Likewise, the staff must have the necessary skills for the position, seeking the specialization of Credit Analysts.
And most importantly: stop serving customers that do not correspond to the target segment and expand the market to areas not served.
