What Does Listening to Credit Officers Teach Us About Clients?

> Posted by Bobbi Gray, Research and Evaluation Specialist, Freedom from Hunger

Listening to the poor without preconceptions has generated remarkable insights about their desires, challenges, and capabilities, with significant implications for designing programs that more effectively meet their needs. What about listening to those who talk to clients every day – the front line staff of microfinance institutions?

To complement direct client surveys, Freedom from Hunger undertook a study called Voices from the Frontlines: A Research Project Focused on Listening to Microfinance Credit Officers in order to listen to the frontline workers of financial service providers who use the village-banking model to provide financial and non-financial services to groups of poor women. Freedom from Hunger worked with five microfinance institutions to conduct this research: CRECER in Bolivia; Confianza, PRISMA, and Finca in Peru; and Alsol in Mexico. Almost 200 interviews and focus-group discussions were conducted with credit officers, clients, and supervisors. We wanted to answer five questions:

  • What motivates credit officers?
  • What is the state of the relationship between the credit officer and the client?
  • What can we learn from credit officers about the people they serve?
  • How can we better support credit officers?
  • How faithfully are programs, policies, and procedures carried out by credit officers?

We found credit officers of these five institutions to be primarily socially motivated; they work for these organizations “to help people.”  Their relationships with clients are crucial for client as well as organizational success. For example, the relationship creates both mutual satisfaction of clients and credit officers; on the other hand, the relationship can create huge risks of dissatisfaction and drop-out when the relationship is weak or falters for any reason. Therefore, these relationships can make or break client recruitment and retention. Product attributes and relationships with credit officers are intertwined. For example, a strong relationship between the client and the credit officer can overshadow poorly designed or less competitive products and services; however, poorly designed products and services also strain the relationship between the client and the credit officer. Products and services that respond to the clients’ needs better are an aid to building a stronger relationship between the client and the credit officer. The client’s relationship with the credit officer therefore deserves more attention than it normally receives when evaluating client satisfaction and outcomes.

There is an inherent tension for credit officers: they have a stake in the well-being of their clients, but they also must have a stake in their employer’s successes. Credit officers acknowledge that policies and procedures are in place to protect the client and the institution, and yet they often make their own decisions within their interpretation of the rules. When they bend the rules, they often feel they are doing this for the benefit of the client.

As a result of this study, we hypothesize that organizations with stronger social performance systems, compared to those with weaker ones, should experience better adherence by credit officers to policies and procedures. If credit officers are primarily motivated socially, they may be more likely to follow policies and procedures when they feel their organization really “cares” about the client.

This study suggests that there is much to be gained by formally “listening to credit officers” as we do to clients. While the role of the credit officer is often appreciated and recognized as an important part of the equation for meeting the needs of the poor, it is unlikely that they have been seen as real levers for change.

Bobbi Gray, Research and Evaluation Specialist, joined Freedom from Hunger in 2004. She works with Freedom from Hunger’s partners to design, implement and analyze research and evaluation studies that measure and assess the impacts of Credit with Education and other program interventions, including feedback of this information to stakeholders for decision-making. She also specializes in helping partners develop robust social performance management systems whereby organizations put their social mission into practice. Bobbi helps oversee the ongoing project to develop, test and document the food-security scaling for use by partner organizations to assess poverty levels of their clients and changes in poverty over time.  

Image credit: World Vision

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