CASE STUDY: OPERATIONS
MokshaYug Access | Unitus MFI partner since 2007
Background
MokshaYug Access (MYA) is a rural infrastructure and services company serving the Bagalkot district of India, with a primary focus on microfinance. It strives to offer more products per client in order to comprehensively meet more household financial needs, and emphasizes microfinance as a distribution channel. MYA wants to be “a one-stop-shop” for financial services in the regions it serves.
Challenge
In December 2007, MYA asked Unitus to help review its processes and identify opportunities to increase efficiency of operations of its microfinance business. MYA also wished to develop a plan to roll out its livelihood businesses.
Solution
The Unitus team and MYA began with the Unitus Efficiency Advisor, benchmarking MYA’s performance against self-selected MFI benchmarks for key financial and operational ratios. The ratios were presented in a dashboard through easy-to-understand graphs and tables. MYA also evaluated how these ratios had been tracking over time.
Simultaneously, the Unitus team trained MYA staff on process mapping for all key customer value processes. The process maps were validated by Unitus consultants who spent time in the field and at the head office.
While in the field, the Unitus team conducted various analyses, such as the cost of delivering multiple insurance products, customer acquisition and maintenance costs, the cost of idle cash within the system, and a comprehensive cost-benefit analysis of an internal courier service. The Unitus team recommended changes in different areas across the microfinance business and also evaluated the recommendations for ease of implementation and bottom-line benefit to MYA.
In the next phase, Unitus hosted a strategic management and innovations workshop at which MYA executives and Unitus consultants brainstormed and analyzed the viability of potential products for the livelihoods business, primarily leveraging value chain analysis. The microfinance recommendations were also refined through a field staff workshop with branch managers and loan officers which was conducted in the local vernacular language.
Impact
Impact was found at each step in the process. By leveraging the Unitus Efficiency Advisor, MYA immediately identified key areas for improvement in loan officer productivity and the need to offset rising financing costs. The MYA team intends to continue to track trends in their key financial and operational metrics with the Efficiency Advisor.
Through the tools and guidance provided by Unitus, MYA did not just document processes, but also identified non-value adding activities at each step of the process, discovering a number of opportunities for process improvements. MYA implemented nine recommendations within two weeks of the initial efficiency analysis, considering them high-impact and critical for the organization. Initiatives are expected to increase revenue through more float income, increase in members per loan officer ratio, customer retention, employee retention, product profitability, and reduction of travel costs. The strategic workshops provided MYA with a rollout plan for the livelihoods business which included specific HR, Technology, Capital, and Partnership initiatives needed to support the livelihoods value-chain.
In sum, a young, innovative MFI was provided with a fresh perspective on its processes and gained insights derived from Unitus’s extensive experience within and outside its network of partners. Unitus consultants continue to track progress of these projects and provide guidance to the project teams, ensuring successful implementation.
Feedback
“I found the planning session with the Unitus team to be a brilliant exercise! It really helped us prioritize our rollout based on the competencies and it more than met my expectations . . . As part of the efficiency assignment, the Unitus team thoroughly studied our microloan and micro-insurance process through onsite visits and interactions with the MYA team. The recommendations they made provided options for raising productivity through lean processes, assigning tasks based on cost of resources, increasing manpower efficiency, and cash management processes to execute disbursements, collect repayments, and manage liquidity at the branch level.
I am confident that this exercise will help us move closer towards operational excellence in processes and branches, which will enable us to lower the cost of servicing our customers—thereby lowering interest rates to our clients while better understanding client needs and better safeguarding against operational and financial risk.”
-Harsha Moily
CEO and Founder
