Donors as Silent Partners in MFI Product Development: MicroSave-Africa and the Equity Building Society in Kenya

This case study illustrates how donor-support in Equity Building Society's (EBS) product development has helped the rapid growth of the Kenyan MFI.

The paper informs about:

• The background and origin of EBS;
• The building up of EBS' internal capacity through market research and fieldwork training in product development;
• The factors leading to success, include:
  • Donors leaving product development to the managers of EBS;
  • Product design being driven by client demand;
  • Basic institutional capacity to handle product development being in place;
  • Having a systematic product development process.
• Benefits of product development to EBS include:
  • Greater client retention, improved outreach and higher long-term sustainability;
  • Increased efficiency and productivity;
  • Increased profitability.
• Benefits of product development for EBS clients include:
  • Diversified product menu tailored to client needs;
  • Clear product terms;
  • Improved access through expanded operating hours.

Finally, the case provides lessons for donors looking to support MFI efforts. It suggests that donors should act as a "silent partner" to:

• Help identify and connect the client institution to quality technical expertise;
• Look for partners that explicitly seek feedback from clients when designing products;
• Support the necessary organizational changes;
• Initiate and encourage information exchange between financial institutions and donors;
• Take a patient, long-term approach to funding that rewards institutional performance and outreach.