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Magic…Madness…Mantra…Mystery Tool for Micro finance Customers

January 1, 2016

Call it magic, madness or mantra… Micro finance industry is booming and so is the associated risk in the extent of collections. The magicians of the micro finance companies – the CEOs are looking at ways to make their company prosper.  This time around, the magic spell they want to cast is through their new wand…..unheard, unseen and inexperienced by their Indian borrowers….the magic wand of testing.  The magical words and statements that would mesmerize the minds of the loan applicant and reveal their inner-self. Varam is coming up with a mystery tool to understand the psyche of its customers, to evaluate their creditworthiness, to aid in vast reduction in default rates and to bring in profits.  While certain Tools for microfinance is available in US, Brazil and such tests are being tried out in India in a very small scale, Varam’s very own Research Team would come up with a Mystery Test that is relevant for India and to the Indian context.  This Mystery Test amongst other critical things would assess the Entrepreneurial quotient of its customers!  The results of the tool would not only be used as a screening tool but also to identify the entrepreneurial talent, train them and bring change little by little to the life style of their customers. The pilot projects to evaluate Impressions of good customer character would be implemented by comparing the scores of Mystery test with that of customer’s actual business performance and repayment history thus arriving at that decision making Magical Number that would aim in the overall objective of this project.  We are conscious of the first impressions that our customers are likely to create. It’s a challenge to come up with a test to cater to that target audience segment that has to capture all the required ingredients we aim to gather in a smart way and yet not allow the customer to manipulate the responses. We have just begun our journey in the Mystery domain and it’s a long way to go – but we shall soon!

Contributed by Dr. V. Krithika, Consultant for Varam

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