This detailed podcast, by the engagement senior-partner, discusses the challenges and complexities of running an engagement to advise on the economics and strategy of a large micro-finance enterprise.
In this study, a Fortune 500 bank believes it has found a winning strategy to target consumers who subsist on less than $5 a day.
The client is hoping they can capture up to 30% of this market, and push their revenue growth above the magical 10% threshold. In this market where 40% loan default rates are the norm, where literacy levels are well below 10% and where no formal banking channels exist, the bank is hoping, praying really, that the risk mitigation best-practices sourced from a joint-venture with Banco Azteca of Mexico will solve all their problems.
The bank feels more than a little optimistic due to the significant profits of a 5-year pilot, begun in 2006, where they partnered with South Africa’s state-owned banks. The board has giddily, and greedily, given the go-ahead to end the partnership with the state bank and commit hundreds of millions of dollars of shareholder capital to building hundreds of micro-finance retail branches across the rural interior.
On the eve of the rollout, concerns about communicating the strategy to certain vocal shareholders have led to the appointment of a team of management consultants to assess the strategy. This is the story of what they found and how they fixed the problems.
The 305 page book is supported by excel, word, power point, video, audio files, and access to the discussion forum. + 300 supporting documents. All documents may be downloaded and edited.