Client management is one of three challenges that microfinance institutions face today. This is especially relevant as new technology-oriented companies enter the industry, challenging long-established inclusive financial institutions to adjust their corporate strategy to retain clients and remain competitive.
Yet, for many microfinance financial institutions, finding low cost and easily-implementable ways to engage with their customers (and reach new ones) is a significant challenge. Social media is one option.
The future of social media
Facebook CEO Mark Zuckerberg’s Internet.org initiative launched last year with the goal of helping make the internet available to the entire world. Internet.org is taking a big step towards this by launching an Android app that provides free data access to services like Google, Wikipedia, Facebook, and more. The app is initially available in Zambia, with plans to extend it to other developing markets over time. You can read more about the services that have been launched here.
While Android users can simply download a standalone version, all of the services can also be accessed freely through internet.org on feature phones, or from within Facebook’s Android app. Internet.org has partnered with Airtel in Zambia to provide free data access, and the initiative has been focusing on developing business models to incentivise companies to provide cheaper internet access in specific regions.
Alongside the app launch, Internet.org is also experimenting with drones and satellites to deliver internet to remote areas, and Nokia phones to bring online classes to Rwanda. Initiatives like Google’s Project Loon and Mozilla’s Firefox OS are also trying to address similar goals, but Internet.org has created a partnership of technology companies like Facebook, Ericsson, Nokia, Qualcomm, and Samsung to improve internet access worldwide. Internet.org partnerships have helped millions get online in countries like the Philippines, Paraguay, and Tanzania. With only around 30 percent of the world’s population accessing the internet, this latest app effort in Zambia will surely help improve upon that small percentage.
Benefits of social media for customers
The adoption of social media in the microfinance sector could potentially benefit both customers and financial institutions. Social media enables customers to share and exchange information with others, and enables you as a financial institution to connect with your customers as well as their personal and business networks. Even without mobile data connections, many customers are regular visitors to Internet cafes: especially young adults in cities, the traditional “early adopters” of new servers and channels who are increasingly the key influencers and educators of their parents in more rural locations.
An increasing number of financial services companies working with low income populations are leveraging social media to their advantage – here are just a few examples:
LAPO Microfinance – a large microfinance institution spread across Nigeria, which uses Facebook to highlight tailored products they offer for specific purposes, including festival loans, schemes to encourage housebuilding, and agriloans. They also include interviews and testimonials from customers.
Taysir Microfinance – a new microfinance institution in Tunisia, that informs potential and existing clients about a range of different services they offer, from mobile “branch in a van” to free financial literacy training, together with news and general information.
bKash Limited – a mobile financial services company based in Bangladesh, that uses Facebook to both promote new “ways and places to use bKash” and encourage customer dialogue. They are a fairly new company, having launched in 2011, but already have more than 500,000 “likes”