How to Improve Customer Experience in Microfinance

The world is changing, and it is changing fast. With the help of technology, businesses are becoming more efficient and transparent. But when it comes to digitization, customer experience becomes a major challenge. And it is not any different for digital microfinance. In this blog, we are going to discuss how you improve customer experience in microfinance.  

According to Kevin Stirtz,

“Every contact we have with a customer influences whether or not they’ll come back. We have to be great every time, or we’ll lose them.”

It means customer experience is everything and is the only thing that will influence your customers to come back. But the question is, how do you improve your customer experience in Microfinance?

Before we answer the question, let’s discuss customer experience in more detail.

What is Customer Experience?

Customer experience in microfinance refers to the efforts an institution makes so that each customer feels valued while interacting with the MFI. Throughout a customer’s journey, there are countless interactions. And the customer experience is measured depending on satisfaction.

When it comes to digital microfinance, customer experience is more virtual than physical. Since the microfinance industry is not yet heavily virtual, you can take digital banking as an example.

When you take a loan from a bank, you can get it transferred to your account. And it is very satisfying for the customers. However, the best part is about the repayments. Because of the technology, you can now pay your repayments online. You don’t need to visit any branch.

In this process, a customer’s experience is more pleasing. But that satisfaction also depends on how advanced your digital system is. The same thing goes with the digital microfinance infrastructure.

What Do Customers Expect from the Digital Microfinance?

Now that we know what customer experience in microfinance is, it is time to know what customers expect from you.

Customer experience has been paramount in every sector in recent years. And we can only understand it by the expectations of our customers. So, what do borrowers expect from microfinance?

Firstly, people expect accessibility. Like banks and other financial services, microfinance should also provide user-friendly digital platforms. For example, nowadays, people don’t like you visiting them door-to-door for repayments. They want to do it themselves.

Secondly, they expect real-time assistance. According to several reports, instant support ensures better customer retention. And in digital microfinancing, you must ensure that for better customer satisfaction.

Thirdly, customized service is getting popular. With the change in borrowing behaviour, people always look for personalized service. But most MFIs don’t provide according to their customers’ needs.

Finally, people are looking for privacy. But in traditional microfinancing, people don’t have much privacy. So, it is one of the demands every customer opts for.

Few Trends to Improve the Customer Experience in Microfinance

In modern microfinancing, there are so many expectations that we have already discussed. And in order to rise to success, you get to fulfil those. But how would you do that?

Without any doubt, you have to improve customer experience in microfinance operations. Let’s check out some trends that will help you improve the whole customer journey.

1. Build an Advanced Digital Infrastructure

Technological innovation is everywhere, and MFIs are also adapting to the technology solutions. Maybe, you are still running your organization on Microsoft Excel, but you get to understand you need something more sophisticated to better your customer journey.

With a digital infrastructure, you can make things easier and faster for your employees and customers. What do we mean by digital infrastructure?

Well, digital infrastructure refers to a core banking solution that will automate everything, from customer evaluation to repayments. It will make things timeless and effortless.  

2. Introduce Real-time Support

To improve the entire customer experience in Microfinance, you must not stop at automation only. You also need good real-time support. In digital microfinancing, real-time support is inevitable. And without it, you will make your customers disappointed.

But what is real-time support anyway? With real-time support, we mean to say instant support. You provide it when your borrower needs it. For example, if someone wants to know how much is in his savings, they may call your helpline, and you can provide that information instantly.   

3. Offer Multiple Loan and Repayment Options

People love options! And they hate when they cannot get something how they like it.

Most microfinance organizations offer a very limited loan scheme. So, it is important for you to offer multiple options. On the other hand, when it comes to repayments, everyone has to pay it maintaining the same cycle, which is not good. So, you get to forget the concept of one size fits all if you want to succeed.

If someone receives salaries monthly, they would usually prefer a monthly repayment. But those who work on a daily basis would go for a weekly repayment. But there is no such system. Instead, everyone has to maintain the same repayment cycle in a group.

So, offering multiple loans and repayment schemes is better for everyone. And it helps you improve your customer experience in microfinance.

4. Automate Your Repayment Method

If we are not wrong, your MFI is still collecting repayments by visiting the borrower door-to-door. But why? The world has come far, and you are still in the 90s!

It sounds really backdated. And you get to automate your repayment method now. But how? Mobile banking is there!

with mobile banking, your customers can send you the repayment anytime they want. And this is what they will like the most. Besides, if you have a comprehensive CBS, every time your customers make the repayment, it automatically gets updated on your system. When you do this to your MFI, it will automatically improve the customer experience for your microfinance.

5. Educate Your Customers  

Once you are done with the digital infrastructure, now it is time to educate your customers. Since most MFIs operate in rural areas, your customers will need the training to interact with your system in the beginning. And it is a must; otherwise, digitization won’t help much from your customer’s side.

However, when people start to understand everything and find it hassle-free, they will love it. But make sure your system works smoothly. We can assure you that when you improve customer experience, your MFI will retain more customers. And your repayments ratio will increase significantly.

Hope this blog on how to improve customer experience in Microfinance helps you change your game.