RDU works to: - Identify strategies to improve existing operations and products - Assess feasibility for new products through market research and consumer insight - Design and pilot new products and processes - Explore and manage “finance-plus” initiatives and partnerships

1. Research & Development Unit of BRAC
Microfinance
Identifying needs, nurturing solutions
February, 2014
www.brac.net
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2. Inauguration
• Launched in 2010 with four objectives:
 Identify strategies to improve existing operations and products
 Assess feasibility for new products through market research and consumer
insight
 Design and pilot new products and processes
 Explore and manage “finance-plus” initiatives and partnerships
• In 2013, partnered with BRAC’s Social Innovation Lab in
to enabled greater impact and scope of projects
www.brac.net
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3. Two Aspects of this Unit
• Research
creative work undertaken on a systematic basis for the development of the program’s
knowledge and use it to devise new applications
• Development
determination of techniques for the production of new products, services or
processes
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4. Research
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5. Current research projects
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Branch resilience to disasters
Financial diaries
Feasibility of housing loan
Development of matrices for analyzing scalability and
success/impact of Microfinance pilot projects
www.brac.net
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6. Performance implications of location
decisions given different types of disasters
 Ongoing research project initiated in October 2013 with Cambridge Judge
Business School
 Aims to determine how natural and man-made disasters influence location
decisions and affect the performance of BRAC Microfinance field offices.
 Some of the research questions include:
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Do organizations learn from political disasters?
Do organizations learn from natural disasters?
If so, for how long following a disaster do these effects persist?
Do organizations learn differently from minor disasters than they do from major
disasters?
– What are the performance implications of location decisions given these types of
disasters?
www.brac.net

7. Financial Diaries
 Ongoing study initiated in October
2013
 Research methodology that involves
collecting high-frequency data of
household transactions over a certain
period
 Purpose
– serve both as a consumer research
tool on microfinance borrowers and
– an impact assessment tool for MF’s
multiple endeavors.
 The respondents consist of
microfinance clients, both BRAC and
non-BRAC, and non-borrowers
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8. Feasibility of housing loan
 Scoping study in collaboration with the University of Notre Dame
 This exercise is aimed at finding commercially viable housing financing
models used by MFIs around the world that can be replicated in the context
of Bangladesh.
 This could have an effect for urban floating populations
 Rural housing products would also be thought about
 These housing models could either lead to ownership or provide
affordable housing for low income households.
 This study will also look at partnership models and case studies to
understand how partnerships can produce a better housing finance product.
www.brac.net
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9. Standardized system for analyzing
success/impact of Microfinance pilot projects
 Ongoing research project initiated in October 2013 with Brown
University
 Purpose
 Develop standardized matrices to analyze success/impact and
scalability of pilot projects
 Could be done
 By analyzing common indicators of success and failures
 Constructing a literature review on performance and assessment
standards and also
 Analyzing how development organizations have designed and
evaluated the performance of similar programs and assess best
practices.
www.brac.net
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10. Development
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11. Overview of Current Pilots, by theme
 Technology focused
 Monthly savings collection through mobile technology-bKash
 Skills+ opportunities
 Youth Employment through Skills (YES)
 Product development, integration and partnership
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Medical treatment loan
Loan product for people with disabilities
Preventive health care services for Microfinance clients
Integrated project for Adolescents and Youth
www.brac.net
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12. Monthly Savings Collection through Mobile Money
Who: existing microfinance clients
What: monthly savings deposits made by mobile
money, instead of a trip to the branch office
Why: convenient way of payment, increase the
savings behavior, familiarization of technology
Key indicators: in some branches, 25% of clients
making deposits via mobile money
What’s next: improving client uptake of the service
through increased financial education and
awareness raising
www.brac.net
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13. Youth Employment through Skills (YES)
Who: children of microfinance clients, ages (18-30)
What: technical training, training loan facility,
stipend and job placement support in several
industries including leather, tailoring and
garments;
Why: to combat youth unemployment and poverty,
and to generate oppotunity for the children of
BRAC Microfinance clients.
Key indicators: 121 people trained and 100 of them
placed for employment till Feb 2014
What’s next: scaling up to more areas partnering
with Ayesha Abed Foundation for job placement
www.brac.net
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14. Medical Treatment Loan for Microfinance
Clients
Who: MF clients in need of health care
What: To assist MF clients, in partnership with HNPP,
to absorb and manage the catastrophic costs of
health care
Why: Poor health and health events are a significant
cause of loan defaulting and create vulnerability
for economic decline. In lieu of formal loan options,
families often delay treatment, sell assets, and/or
take loans at exorbitant rates from informal money
lenders
Key indicators: 59 loans have been disbursed and the
total amount is USD 9,128 till Jan 2014
What’s next: Scaling to 28 Upazillas,150 branches and
200,000 households this year.
www.brac.net
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15. Loan Product for Disabled People
Who: People with any form of disability
What: Loan product for disabled people to help find
new livelihoods and to boost their confidence.
Partnership project with Centre for
Rehabilitation of the Paralyzed and ADD
International, Bangladesh
Why: In response to the common exclusion of
disabled people from microfinance, especially
with their needs in mind as part of social
responsibility
Key Indicators: in some branches, loan range is
from USD 38 to USD 1,026, loan duration is 12
months
What’s next: scaling up with more areas all over
Bangladesh
www.brac.net
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16. Linking health care services with microfinance activities
Who: An important regular institutionalized provision in
health care services for Microfinance clients
What: Identification and screening of health problems,
provide information, education and advice on health
measures, refer those who are identified with the
signs and symptoms of diseases to appropriate
health facilities.
Why: provide need-based health care services to live a
socially and economically productive life and actively
participate in the development activities of the
country along with BRAC.
Key indicators: check up performed 14,864 till Dec 2013
What’s next: scaling up with more areas all over
Bangladesh
www.brac.net
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17. Financial products for adolescents and youth
Who: Focused on the youth population of the
country
What: Knowledge, skills and rights based
services that includes education, health,
human rights, and microfinance components.
Why: Would enable the better management
and utilisation of the youth population of this
country.
Key Indicators: More than half of the
adolescent club members from two branches
have taken up savings services offered to
them until December 2013.
What’s next: Scaling up the current savings
services to more areas, and find opportunities
to offer credit to the youth.
www.brac.net
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18. Special projects
• GIS mapping
• Reviewing and improving current loan appraisal process
www.brac.net
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19. Mapping through Geographic Information System
(GIS)
What: Mapping the over 2,000 microfinance
programme’s branch offices nationwide
Why: enhanced ability to assess coverage
and performance, make programmatic
decisions, and facilitate coordination
What’s next: in partnership with the Social
Innovation Lab and ICT department,
expanding the scope to include all BRAC
offices and other types of facilities, such
as health clinics, enterprise locations,
and training centers; developing a userfriendly platform for wide use across the
organization
www.brac.net
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20. Reviewing and improving current loan
appraisal process
What: Redesigned and enhanced the loan
appraisal process and tools
Why: To make the process more efficient,
transparent and client focused.
What’s next: Introduce new thinking in the
appraisal methods and collect essential data
more effectively.
www.brac.net
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21. Looking back: some past
achievements of the R&D unit
• Introduction to monthly instalment collection process
• Region restructuring process
• Research on skills
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22. Introduction of monthly installment collection
 Initiative began in 2010 with a view to making the microfinance operations
more efficient and cost effective.
 Monthly collection as opposed to weekly collection would drastically reduce
the number of installments over the same period. As a result this was
perceived as a way to save the agents time so they can reach more
borrowers.
 The borrowers in turn would also be able to use the loan for a full month
before they need to begin paying back the loan.
 Performance:
 Currently there are around 950 branches operating on the monthly
schedule. These branches mainly serve urban, semi-urban areas where
most clients are salaried employees, small business owners and would
be better served on a monthly schedule.
 Performance: According to 2014 statistics, currently an agent working
on the monthly model supports 364 borrowers on average, as opposed
to 266 for agents working on a weekly schedule.
www.brac.net
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23. Region restructuring process
 Initiative began in 2012 for the Dabi microfinance program.
 This was an effort to tackle the overlap of the operational areas between
different branches. This would improve branch efficiency and help better
manage the operational areas.
 Methodology:
 Rural branches were demarcated using Mouza, the smallest
geographical unit. The principle followed dictated that one Mouza would
only be served by a single branch.
 Urban branches due to the density of the population and geographical
proximity to each other were more difficult to demarcate using Mouza.
As a result they were demarcated using Union Wards and also
landmark roads that were used to define the boundaries.
 As of now operations in the whole country has gone through the region
restructuring process.
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24. Research on skills
 Study conducted in 2012
 To obtain evidence based understanding of the demand for vocational
training and expectation of jobs amongst adolescents and youth children
(aged 15-24 years) of the Microfinance borrowers
 Findings
 The study finds a clear demand for vocational training, particularly in
computer operating, tailoring, driving and mechanic work.
 Willingness of the clients to partially finance their children’s vocational
training and
 Also the cost of travelling of their children to travel away from home for the
purpose of receiving vocational training.
 Based on the findings, a successful skills project was initiated and its
currently running in different districts of Bangladesh
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25. Thank You!
For more information please visit http://microfinance.brac.net/
Have an idea for a new product or service? Let us know!
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