Increasing the access to financial services of excluded populations in developing countries is a challenge that vexes institutions as diverse as foundations, the private sector and development organizations. One of the key components of financial inclusion is to ensure that services are provided to clients in a responsible manner and are tailored to their needs. So what do we know about those needs and to what extent are they being met? Overall, not much because, despite the many advances in the establishment of consumer protection policies and standards, the clients’ perspective has been largely missing from the financial inclusion discussion. A new joint initiative between MIX and Hivos, however, shows how the development sector might overcome this challenge by using mobile technology and in particular interactive voice responses (IVR).

The Voice of the Client
The main reason for the absence of client perspectives is the high costs and time involved in collecting them using traditional survey interviews. To overcome these challenges, Hivos, a Dutch development organization with experience in citizen monitoring and MIX, a US non-profit specializing in financial inclusion data and insights in microfinance, have recently tested an initiative called ‘Voice of the Client’. The initiative uses mobile technologies to survey microfinance customers in real time, at large scale and low cost. The first two pilots were carried out in India last year and in Peru this year, where about 10,000 clients were interviewed across eight microfinance institutions.

What are the benefits?
One of the goals of the initiative is to establish a set of standardized, relevant indicators that can be regularly tracked by financial institutions and funders. By accessing such data on a regular basis, financial institutions can improve their quality and delivery of products, increase their market share, compare performance with market peers and show the industry their commitment to transparency and accountability. At the same time, donors and impact investors can use this information to better monitor the performance and progress of the financial institutions towards their development goals, make more informed investment or grantmaking decisions and increase their impact.

The wider implications of IVR
In addition to the immediacy and low cost of such a method (compared to face-to-face interviews and call centres), the results of the India analysis, recently released, show some interesting side-benefits of using interactive voice responses (IVR) as a means to collect data, which those working in development might profitably note. First, we noticed that clients interviewed through IVR provided more candid answers to sensitive questions – such as episodes of mistreatment or bribery by the financial institutions’ staff – than when the same question was asked face to face or through call centres. Second, IVR avoids enumerator errors during data collection since it overcomes interviewer’s bias and possible enumerators’ mistakes in recording answers.  It’s only fair to point out some evident limitations to the method. To make IVR work it is essential to use it in areas with high mobile connectivity. While it is a method that words very well with a limited number of simple questions, so that clients find the experience easy and not burdensome, for more complex questions, a mix of other survey methods is recommended.

MIX and Hivos are now looking to test the Voice of the Client initiative in other areas. In the pilots in India and Peru, the indicators tested were in the area of customer satisfaction and protection, such as exposure to over-indebtedness, fair and respectful treatment from financial institutions’ staff and understanding of prices and terms of loans. However, the Voice of the Client initiative can be used to survey any area and opens new possibilities of data analysis that can empower end-users, beneficiaries or constituents or whatever you choose to call them and have their voice become a driver of change, not only in regard to financial inclusion, but across the whole of the social sector.

Micol Pistelli is the Social Performance Director at MIX. Email mpistelli@themix.org