The recent shift in the dynamics and competitive nature of microfinance industry has made many users especially females sceptical about the objectives and services provided by the institutes. However, given the client-centred nature of the industry, the management for microfinance institutions need to understand ways to connect with their customers more efficiently. One of the successful narrative approach based tools involved in connecting with the consumer through a human centric lens is called ‘trust circles’.
The trust circle exercise involves putting the beneficiary at the centre and then having various bands around the beneficiary where each circle reflects the degree of closeness and trust they have with various people/groups in their lives. The people who are closest to the beneficiary, with whom they share an unquestionable bond are the ones in the innermost circle and the level of trust decreases with each outer band. There can be as many circles as needed, however, best practice is to stick to first five circles.
Working out the trust circle can help microfinance providers to get an insight of the networks of beneficiaries. There circles can be effectively used to understand the most trusted stakeholders and thus, a best way to connect with the beneficiary. This can be done through a focus group discussion where the participants are representative sample of their targeted group are requested to draw and identify the key stakeholders in their own trust circles.
I actively interacted with the microfinance beneficiaries in a recent fieldwork in three districts of Punjab and Sindh. Observations from there have provided an insight to a structure of the beneficiaries’ trust circles. For example, a microfinance beneficiary is typically a female with limited education and access to resources. The closest to her, the people she trusts the most are the other female beneficiaries in her neighbourhood. Given her culturally limited social space, she interacts the most with other females in her neighbourhood. They face similar issues given the similarity in location and socio-economic status. Therefore, one of the best ways to connect to new beneficiaries is through the existing network of women beneficiaries who can share the program details and address concerns with other women in their areas and recruit them exclusively based on the trust they share.
In the field, another important stakeholder that female beneficiaries trusted appeared to be the loan officers both males and females. Loan officers enjoyed a very privileged position both out of respect and authority. As the loan officers are the sole link between the microfinance institutes and beneficiaries. Most of the beneficiaries have been part of the program for multiple cycles or they plan to be in future. Hence, having a good relationship with loan officers had many advantages such as ease in paperwork, lenient monitoring system, assistance in payback and applying for future loans with increasing amounts and durations. Therefore, recruiting local loan officers with reputable network and influence in the specific area is essential for outreach and connecting with female beneficiaries.
One interesting observation was that level of trust associated with information received through phone services such as SMS was highly varied. Women based in relatively urban areas that were literate and were actively involved in businesses they took the loan for usually owned personal phones and sim cards and were more trusting of information and promotions shared through an SMS as compared to women who were based in remote rural areas. Women in rural areas were illiterate and relied more on male family members for access to information and connecting to outside market. They usually used their male family members phones or had common phone for the whole household. Hence, they were less likely to be targeted through an SMS service. This further highlighted the importance of exercises such as trust circle that enable organization to identify and understand the network and trusted mediums of targeted group of beneficiaries.
Conclusively, the trust circle exercise may differ for beneficiaries depending on multiple factors such as demographics, socio-economic factors, literacy rates, access to information etc. Hence, this tool could be very effective for microfinance organizations as well as any other organization that has a human centred approach and wants to identify the best ways in terms of people and mediums to connect to their targeted beneficiaries. The results can provide actionable information to management and policymakers that aids in decision making as this exercise helps them better understand the targeted groups sentiments and trusted networks providing an effective way to connect.