Transparency Through Client Feedback

27 July 2010 at 23:56 7 comments

By Jeremy Gordon, KF11 and Rachel Brooks, KF10, Kenya

Esther Keino hopes Juhudi will consider giving loans without requiring solidarity groups in future as group lending is sometimes discouraging because not all members are reliable.”

Peter is grateful Juhudi Kilimo is focusing on the rural poor who would otherwise have limited or no access to capital. He likes the funding for dairy cows as it is not just for financial purposes but also for social purposes, as it improves the health of families.”

Kiva entrepreneurs can often be a little uncomfortable answering even some of the basic questions for a Kiva profile. Yet at the end of an interview, when Juhudi Kilimo loan officers ask if clients have any other comments, the clients often noticeably relax and open up with quite a few other comments.

Client Interview

A Juhudi loan officer interviews Kiva entrepreneur Stephen Musa

Many are of immense gratitude—enough to make the day of everyone in the head office. But some are not so appreciative. Some comments complain of changes or loan terms. It would be easy to ignore those comments and certainly to exclude them from the Kiva Profile, but Juhudi Kilimo made a conscience choice to include them, whether they are positive, negative, or just of general feedback. Together they create a picture of how microfinance truly works to serve clients.

Kiva Coordinator Christine Odongo says, “We want to know everything our customers have to say. The feedback is good for us. Then we know exactly what they need and the kind of products they want.” Describing how it feels to get positive feedback she says, “Whoo! Very good. We post that profile right away without reading it twice. But if the comments are negative, I’m sure to share it with our Director of Operations first so he can know what the client thinks.”

Director of Operations Albert Onchiri gave us this example about some less-than-enthusiastic feedback he received from a Juhudi client: a Juhudi client received a loan for a chaff cutter and “immediately after completing repayment of the loan, the animal got sick and passed away. ‘Why didn’t you advise me to get a second dairy cow instead, rather than a chaff cutter?’ the client asked us.” Mr. Onchiri consented that, “It’s our responsibility to make sure that the animal is properly stocked. Having a chaff cutter for just one dairy animal may not make business sense.”

The most common types of negative feedback that come up in borrower interviews are complaints about interest rates and requests for larger loans. Mr. Onchiri responds that, “For interest rates, the management needs more insight on what’s happening in the market. We’re not in direct competition with the commercial banks.  [Some commercial banks’] interest rates are very fair, but their scale allows them to spread their costs. As a small microfinance institution, we need to compare ourselves to other MFIs working in the same region.” Mr. Onchiri said that many of the clients are well aware that other institutions sometimes offer better rates than Juhudi but they told him, ‘We cannot leave Juhudi until we start seeing [name of commercial bank] as Juhudi.’ [Our clients] want to see an institution that’s involved in their activities, where the staff follows up about the health of the animal, notifies them of expiration dates for insurance premiums, etc. This is an added advantage for Juhudi.”

In response to the desire for larger loans, Mr. Onchiri says, “We need to have that history—-to understand how you’re developing your cash flows. It’s our policy, and this policy is based on the fact that we want to have a relationship with you. If you want to build this relationship, take a smaller loan and repay in nine months.”

Below is a selection of other client feedback that Juhudi has posted with their Kiva profiles.

Betty Kakhasa is thus far very pleased with her association with Juhudi Kilimo/Kiva. She is proud of the changes she has witnessed in her own family and her town, and hopes that one day all of her needs will be met through continued cooperation with Juhudi/Kiva.

Joyce Cheruiyot would like Juhudi to reduce the interest rate on loans and re-introduce grace periods on second loans.

Peris Karuru says Juhudi Kilimo is really helping low-income farmers unlike other financial institutions.

Peter Nchore requests that Juhudi reduces their interest rates to make it affordable to farmers and to increase the size of loans offered.

Julia Kamau says that Juhudi groups are different from any other since they organize trainings for small scale farmers on how to do farming as a business.

Jeremy and Rachel are Kiva Fellows working with Juhudi Kilimo in Nairobi.

Things you can do
Tell us what you think! We love feedback from the Kiva community.
Lend to a Juhudi entrepreneur and support this MFI’s commitment to transparency.
Volunteer with Kiva, or apply to join the next class of Kiva Fellows.

Entry filed under: Juhudi Kilimo (JK), Kenya, KF11 (Kiva Fellows 11th Class). Tags: , , , , , .

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7 Comments

  • 1. Jagsleessplum  |  26 February 2011 at 07:00

    Hi, i’m Jagsleessplum advanced one, giant site.

  • […] In my time volunteering with SPBD, I’ve made many trips with the Center Managers (CMs) out on the field to meet clients, interviewing for journal postings, or just to see the atmosphere at center meetings. Often times when I’m introduced to the borrowers, I’m either introduced as an Kiva fellow visiting, or a person from the SPBD office observing. But once I get to sit and talk to clients, and explain to them what a Kiva Fellow is and what we do, I get a number of interesting questions. As the questions tend to be similar on my visits, I figured I share the top 5 questions – and my responses – that clients have asked me each time. (Btw, another great article about client feedback has been written by Jeremy Gordon and Rachel Brooks which you can find here). […]

  • […] In my time volunteering with SPBD, I’ve made many trips with the Center Managers (CMs) out on the field to meet clients, interviewing for journal postings, or just to see the atmosphere at center meetings. Often times when I’m introduced to the borrowers, I’m either introduced as an Kiva fellow visiting, or a person from the SPBD office observing. But once I get to sit and talk to clients, and explain to them what a Kiva Fellow is and what we do, I get a number of interesting questions. As the questions tend to be similar on my visits, I figured I share the top 5 questions – and my responses – that clients have asked me each time. (Btw, another great article about client feedback has been written by Jeremy Gordon and Rachel Brooks which you can find here). […]

  • 4. Petra  |  30 July 2010 at 05:29

    Silly idea, perhaps, but could the entrepreneur with the chaff cutter ( a device that chops up hay, as I understand it) not use this machine to help out neighbors who still have cows, in return for some money?

    I think it is a bit of the MFI’s responsibility to see that the entrepreneur uses the money wisely. (For example: he’s not buying a fisher’s boat when he’s living 100 kilometers from any stream; or buying a tv when his children are hungry). But there are borders to the MFI’s responsibility and there the entrepreneur’s own responsibility starts.

  • 5. Adam  |  28 July 2010 at 22:54

    Very interesting .. thanks you

  • 6. Grace Nattoolo  |  28 July 2010 at 22:03

    Thanks for the wonderful post Jeremy and Rachel. This is real transparency, it is good when the Providers put the ears to the ground to know what happens down there. In the end, it brings about positive benefits as issues are tackled well.

    I send my regards to Christine Odongo, the Kiva Coordinator, i am one too with Pearl MFI in Uganda.

    Thanks for the good work.

  • 7. Nat Robinson- General Manager, Juhudi Kilimo  |  28 July 2010 at 08:19

    Great post Jeremy and Rachel. The team at Juhudi Kilimo did not think it would be such a big deal to post the client feedback on the borrower profiles. I hope that it will generate some solutions to our borrower’s concerns.

    I had one thing I wanted to include about the interest rate feedback from our borrowers. The loan interest rate is a very sensitive topic in microfinance and can be easily manipulated to take advantage of low-income borrowers. A group called MFTransparency recently reviewed many of the microfinance organizations in Kenya in 2009 and posted the “actual” interest rates on their website at http://mftransparency.org/data/countries/ke/. Juhudi Kilimo participated in the research and we were pleased to see our loan products to be priced right along the country average.

    This does not mean we should just keep the same rates as everyone else. We are working extremely hard to improve our efficiency with technologies like the M-Pesa mobile money transfer system so that we may bring our interest rates down to better support our smallholder farmer borrowers in the future.

    Thanks!


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