Sunday, December 14, 2008

Exit surveys

I love exit surveys. First, exit surveys provide MFIs with critical data. Since profits are typically made in later loan cycles, repeat clients are critical to an MFI’s sustainability. Second, exit surveys are easy. The greatest danger of exit interviews is that MFIs will over complicate them, and then end up not conducting them because of it. So my advice is to keep it simple.

The easiest way to run the exit survey is to let your loan officers conduct them at their last meeting with the client. This way, there’s no need for an extra visit to the client – it saves everyone time and money. And since the loan officers are used to extracting all sorts of personal information from clients, they’re quite capable of asking one more question: why are you leaving?

The trick, of course, is creating a list of standardized responses so the answers loan officers collect can be entered into a database by the marketing department and analyzed by management. A good step towards developing the survey instrument, therefore, includes discussing typical drop-out reasons with loan officers.

While there need only be one survey question, “why are you leaving,” the loan officers should have a list of boxes and check the one box which best matches the client’s response. Those responses could include:

· Failure to repay the loan (i.e. the client is being forced from the program)
· Don’t need another loan
· Closed business
· Illness/death
· Too many group meetings
· Interest rate too high
· Loan too small
· Group closing

But only consider the above list a starting point. Every environment will be different, and yours may lead to other important reasons clients leave that aren’t included in the above list.

Of course, there is one answer which borrowers may be reluctant to give a loan officer – what if they’re leaving because they don’t like the loan officer? The best answer I can give to this is to include the loan officer’s name on the form and include that in the data analysis as well – the MFI should track drop-outs by loan officer, and if someone’s is unusually high, that’s a red flag for management.

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