Orality and Microsavings
This note discusses the advantages of including orality in microfinance.
It is a common practice in microfinance for illiterate clients to use thumbprints instead of signatures on loan contracts. This method, however, poses a danger of client exploitation. 'Orality' refers to the characteristic modes of thinking, speaking and managing information in societies where most people are unfamiliar with writing and print. Ways in which MFIs can respond to challenges of orality include:
- Adaptations to control systems;
- Improvements in retail interface;
- Sensitization of staff;
- Public positioning;
- Winning client trust by addressing assumptions of oral culture.
These methods may increase client understanding of the financial services interface, provide assistance in improving literacy and numeracy, increase staff motivation and help strengthen bonds of client loyalty over the long term. These features can also provide a compelling and unique selling proposition if they are mainstreamed into MFI and business correspondents' control and delivery systems.