2. Product menu driven approaches dominate
consumer finance
Design and provision of several disaggregated, standalone
products available from a variety of “product manufacturers”
The customer facing front-end in this system is typically an
agent marketing the products
Agent often not independent of manufacturer but subject to
disclosure norms
Low emphasis on expertise of the agent
Products may have overlapping functions
Customer chooses from a menu, absorbs mismatch between
her needs and available products
2
3. This approach has dominated most efforts towards financial
inclusion, which is often defined in terms of standardised access
to one or a few “simple products” – 52 week loan or a low-
balance savings account
3
4. Simplicity & complexity in products
Product A: a crop loan to a farmer; equated monthly
installments
Product B: a crop loan to a farmer; principal and interest
payments contingent on observed rainfall in her
neighbourhood
Does “simplicity” solve consumer problems?
4
5. What would good consumer finance look like?
Financial propositions tailored towards individual needs
and risk profiles
The back-end could be a variety of product
manufacturers but the customer-facing front-end is
unified and local
Very high emphasis on provider expertise (analogous to a
doctor)
Informed consent by the consumer
Provider liable ex-post for sale of “unsuitable” services
5
6. Great idea, can it be executed at scale?
The KGFS model for remote rural India
5 local financial institutions, 140 branches,
270,000 clients, 450 wealth managers
The earliest KGFS (4 years) is profitable
Branches provide 18 financial products
No incentives for product sale
Every customer has a personalised financial plan, that
forms the basis for product sale
6
7. Low-cost branches at the village level
Thanjavur, Tamil Nadu Tehri, Uttarakhand
7
9. The basis for a financial plan
Household data collected and verified during
enrollment
We apply an automated framework that optimises:
Liquidity (short and long-term)
Assets and liabilities (eliminate negative carry)
Human capital
Diversification
This suggests a specific portfolio of services
Wealth Manager works with each client to ensure
take-up
9
10. Future work
Auditing for suitability of sale
Development of customer archetypes for acceleration
of wealth manager learning
Learning about techniques that aid customer take-up
of suitable services
Developing wealth manager incentives linked to
financial well-being outcomes
10
