FS Impact Finance spoke with Nwachukwu Nnaemeka, Chijioke Onuoha and Chukwuebuka Nwosu
Our GLS AI – Microfinance Fund’s objective is to make sustainable investments in microfinance institutions (MFIs), thereby supporting economic activities that contribute to financial inclusion. Financial inclusion, in turn, builds on a wide set of screening criteria ranging from an MFI’s social governance, compliance with microfinance client protection standards and the provision of complementary consulting services to borrowers who are facing economic or social issues. The Grooming Centre is among the MFIs in our portfolio that have achieved the highest scores in meeting our screening criteria. We spoke to Nwachukwu Nnaemeka, who is Grooming Centre’s Head of Executive Support & Corporate Strategy, and his team members Chijioke Onuoha and Chukwuebuka Nwosu to find out how Grooming Centre is generating a positive impact through its work.
FS Impact Finance: What can you tell us about your origins as an organization and how it has developed over the years?
Grooming Centre: The Grooming Centre was conceived and established by the founder and CEO, Dr. Godwin Nwabunka in December 2006 – after over 20 years of service in the United Nations – in the Ejigbo local council area, a sub-district of the Oshodi-Isolo local government area in Lagos State. The first Branch, now called Ejigbo 1, started with less than 30 members by the end of March 2007, who received ₦15,000 as the first loan amount. Today, Grooming Centre delivers sustainable financially inclusive products and services, fundamentally guided by the Do No Harm principle, to over 500,000 clients spread across 26 states in Nigeria and has served about 12 million clients since inception.
How do you maintain such a high level of financial and social performance?
Grooming Centre strives to maintain a high level of financial and social performance by investing in the development of our staff and enabling technology. This allows us to stay competitive by improving our ability to deliver high quality products and service to our clients and also work to build strong relationships with them. Finally, we continuously monitor and evaluate our operations, using data to identify areas for improvement and to ensure that we are meeting our goals and objectives.
You pursue a range of CSR activities such as providing educational scholarships, which underlines your support for local communities. You also emphasize training and capacity building to help your clients build sustainable livelihoods and to e.g., enter green microfinance. Please tell us more about your motivation here.
Our motivation is deeply rooted in our belief that financial inclusion and social development are closely linked. By investing in the skills and knowledge of our clients and the community, we can help build more resilient and sustainable communities. We also recognize that our success as an organization is tied to the success of the communities we serve. Ultimately, our CSR activities are a reflection of our commitment to our clients and the communities we serve, and our belief in the power of microfinance to create positive social change.
For which areas are you targeting positive outcomes? How do you assess and monitor outcomes?
We target positive outcomes in a number of areas, including financial inclusion, poverty reduction, and social development. We assess and monitor outcomes through a range of tools and methods e.g., PPI, including client surveys, focus groups, general assemblies and impact assessments. For example, we use client surveys to gather feedback from our clients on the quality of our services, and to understand how our programs and services are impacting their lives. We also use focus groups to gather more detailed feedback on specific programs or initiatives, and to identify areas for improvement. In addition to these methods, we also conduct impact assessments to measure the long-term impact of our work on our clients and the communities we serve. These assessments include both quantitative and qualitative data, and are designed to measure the impact of our work on a range of outcomes, including income, savings, and social development. Overall, our goal is to use these methods to continually improve the quality and impact of our products and services, and to ensure that we are making a positive difference in the lives of our clients and the communities we serve.
In the coming years, would you still see inclusive finance as your institution’s main business, or are you considering other outcome areas?
Yes, inclusive finance will continue to be our main business in the coming years. We believe that there is still a significant need for microfinance services in many parts of the world, particularly in low-income and underserved communities. That being said, we are also exploring other outcome areas that are closely related to our mission of promoting financial inclusion and social development. For example, we are exploring opportunities to expand our services to include financial education and literacy programs, which can help to build the skills and knowledge of our clients and community members. We are also exploring ways to collaborate with other organizations and stakeholders in the microfinance sector to develop and deepen new approaches to promoting financial inclusion and social development. This may include partnerships with other NGOs, financial institutions, or government agencies, healthcare and insurance professionals as well as the development of new products and services that are tailored to the specific needs of our clients and community members. Generally, we continue to innovate and evolve as an organization, while remaining true to our core mission of promoting financial inclusion and social development.
There has been public criticism of microfinance following reported cases of over-indebtedness. What are you doing to protect your clients and reduce risks of over-indebtedness?
We are committed to protecting our clients and reducing the risks of over-indebtedness. To this end, we have implemented a number of policies and practices designed to promote responsible lending and to protect our clients from over-indebtedness. For example, we conduct a thorough assessment of our clients’ financial situation before approving any loans, and we work closely with our clients to develop a repayment plan that is tailored to their specific needs and circumstances. We also provide financial education and literacy programs to our clients to help them build the skills and knowledge they need to manage their finances effectively. In addition to these measures, we also monitor our clients’ repayment behavior closely, and we work proactively with clients who are experiencing financial difficulties to help them get back on track. We also have policies in place e.g., the Client Protection Principle, to prevent clients from taking on too much debt. Overall, our goal is to promote responsible lending and to protect our clients from over-indebtedness, while still providing them with the financial services they need to achieve their goals and improve their lives.
What is your approach to innovation?
Our approach to innovation is to identify the needs and challenges of the target market, research and test potential solutions, and implement and scale the most effective ones. We also understand that innovation supported by stakeholder enlightenment, strategic digitalization of products, processes etc., and positively driving the culture of innovation is crucial to our mission and vision goals – it is not only about creating new products or services, but about improving existing ones, finding new ways of delivering value, and identifying plus reaching new segments of customers or enabling existing clients – internal and external – to adopt improved channels of product and service delivery. Our maiden digital product is currently in development e.g., the SmartBiz solution, and we are exploring other unique options around but not limited to process efficiency, data analysis, and client communications as well.
In one sentence: What is the perfect feedback you would want to hear from a client?
The perfect feedback we would want to hear from a client is that our services have helped them to achieve their financial goals and improve their lives in a meaningful way.