Savings, Loans…and Toilets: Grameen Koota’s Quest to Respond to Customer Demand

Written by Patrick Fisher February 23, 2013 0 comment

As part of our continuing series on the Universal Standards for Social Performance, Grameen Koota presents their organization’s efforts to listen and respond to client needs. At Grameen Koota, this often goes beyond traditional loan products.


Street Money Changer by Mohammad Moniruzzaman  2009 CGAP Photo Contest.



At Grameen Koota in India, efforts to meet customers’ needs go beyond the boundaries of a typical financial institution. The reason is that when this institution creates new products and services, it considers the entire lifecycle and life activities of their clients—from birth to old age, from the household to the business.

That’s why, when customers requested it, Grameen Koota focused on the water and sanitation needs of their clients, including…toilets.

The foundation for these efforts, as explained by Selma Jahic, Partner’s executive director of credit operations, is Partner’s simple but powerful in-house mantra: A risk for the client means a risk for the institution.

“That degree of customer response may seem unusual for a microfinance institution, but it’s not surprising. In a nation with some of the worst poverty on earth, one latrine is typically shared by more than 200 people. And among India’s 1.2 billion citizens, 58% use the outdoors. “Sanitation is a young subject,” UNICEF official Aidan Cronin acknowledged, of the government’s fledgling efforts to address the problem.

Grameen Koota, a Bangalore-based MFI with 314,000 active borrowers, 1,270 employees, and about 150 branches in Southern India, is addressing the problem—because clients asked them to. The MFI’s own surveys showed that over 90% of customers would be interested in toilet construction if Grameen Koota extended credit. And that data point became an organizational mandate, as explained by senior manager for new initiatives, Sameera B., during a recent Social Performance Task Force (SPTF) webinar.

The  webinar, devoted to implementation of Section 4 of the SPTF Universal Standards for Social Performance Management, looked at how MFIs can design products, services, delivery models and channels that meet clients’ needs and preferences.

To promote hygiene, Grameen Koota created an NGO, the Navya Disha Trust, and initiated the Watsan project for water and sanitation. The Watson project helps the MFI’s clients understand toilet technology and infrastructure, the materials needed, and procedures for procuring parts, labor, and government approvals. Because of Watsan, over 5,200 Indian homes obtained water connections and sanitation in 2011–2012.

Grameen Koota follows just this kind of “client-driven” philosophy as it develops products and services across the company, Sameera B. said. GK’s wide product diversity covers not only microenterprise, but also household needs, agriculture, and client and livestock insurance. Its nonfinancial services include business skills development, financial literacy promotion, health and nutritional education, special medical services for women and children, gender rights education, and even “health camps.”

Products offered have cultural names like the Arogya loan (for cashless, in-patient medical treatment) and a Festival consumption loan (to help with costs for Diwali and India’s many other cultural celebrations).

Photo by Kaushik Majumder

Throughout, customer feedback about these products and services is key, Sameera B. said. So clients are interviewed face-to-face monthly by area managers, and by phone—from a call center—daily. Yes, daily. That’s a change from the past when interviews were conducted just once monthly, the manager said. The call center segments clients into six different subsets to tailor questions for them.

When GK saw that clients were struggling with short-term cash flow constraints and were resorting to informal, expensive sources of funds, the MFI responded with an emergency loan program. When clients repeatedly asked about savings and pensions, GK became an aggregator to the Government of India’s Pension Scheme, through which it now facilitates and processes its clients’ enrollment.

When customers again expressed concerns, this time about sanitation, Grameen Koota paid attention. There are deeply embedded cultural concerns here—like the stigma many Indians attach to cleaning toilets. So, awareness had to come first. “GK was aware of the fact that merely providing credit [for household sanitation] would not solve the problem,” Sameera B. wrote to SPTF during a pre-webinar interview. “Efforts toward creating awareness were critical.” That’s how Navya Disha came about—because GK’s focus is financial projects.

A grievance redress system has also helped Grameen Koota capture feedback. The point, said Sameera B., is to gauge client understanding of the MFI’s products and procedures and ascertain client perspective. Customer surveys and market research go out as frequently as once a month; and a “grievance team” proactively collects feedback from different sets of clients on a continuous basis.

These surveys have done their job, Sameera B. said, citing several examples:

• The surveys repeatedly showed that half of Grameen Koota’s clients were demanding home loans; accordingly, the organization now offers home loans via a pilot program at a limited number of branches.
• Emergency loans used to be capped at two per local client group. Due to feedback, that number has jumped to 50% of each microenterprise group.
• Festival loans used to be given only at the branch itself. Now, due to feedback about client constraints from traveling to branches, these loans are disbursed in the groups.

By 2020 Grameen Koota’s mission is to enable economic assistance and social change for over 2 million households in the areas it serves. Getting there will rely on listening carefully and responing to client feedback, Sameera B. said.

“If getting client feedback, analyzing it, and taking decisions is one thing, the implementation of ideas is another,” he said. “The process has to be carefully thought through, and in each step there are multiple aspects that have to be borne in mind, like the regulatory framework, external environment, partnerships, client protection, mission drift, human resources, technology requirements, [and] product and service delivery.

“One has to take a very holistic view of these things…The process of getting feedback from clients has to be continuous and not [be] a one-time activity.”

– Joan Oleck, Freelance writer