“The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer.” Peter Drucker
The informal sector heavily relies on the social contract, which means concepts such as customer relationships and client satisfaction are a natural part of a microfinance institution’s mandate. There are many ways to build strong relationships with clients and client satisfaction is a function of customer service, which itself is an expansive topic. One of these means is ‘client motivation’, which is the use of incentives, reasons, interest and enthusiasm to encourage clients to:
- Run productive enterprises and
- Repay their microloans on time.
These will obviously benefit microfinance institutions themselves in the long run.
Client motivation is a process, with two basic phases, as explained by the Radical Frontier’s Blog.
Pre Loan Motivation or Pre-Entry Motivation of Microfinance Clients
Pre-loan motivation of microfinance clients leverages the prospective client’s personal goals to show how microfinance to develop a business can help the client realize those goals. This value proposition helps align the objectives of microfinance services with the plans and dreams of potential clients.
The expected outcome of this motivation phase is that these prospective members, with the support of their families, will form group and become good and productive members of the program.
On-going Motivation of Microfinance Clients
On-going motivation of microfinance clients attempts to maintain/enhance the client’s credit discipline for the purpose of good repayment rates. This encouragement not only serves the microfinance institution, but also benefits clients as they may be eligible for preferential treatment as a result of better credit ratings.
There are a variety of motivational tools that encourage good behavior as well as prevent negative practices on the part of clients. In either case, a variety of tools works best in the long run, and help convince clients that the microfinance institution is on their side. No doubt, this common interest in client welfare can be the foundation of loyal and lasting relationships with customer.
