Benefits of trust circles in microfinance.

Byline: Amna S. Sandhu

The recent shift in the dynamics and competitive nature of microfinance industry has made many users especially females sceptical about the objectives and services provided by the institutes. However, given the client-centred nature of the industry, the management for microfinance institutions need to understand ways to connect with their customers more efficiently. One of the successful narrative approach based tools involved in connecting with the consumer through a human centric lens is called 'trust circles'.

The trust circle exercise involves putting the beneficiary at the centre and then having various bands around the beneficiary where each circle reflects the degree of closeness and trust they have with various people/groups in their lives. The people who are closest to the beneficiary, with whom they share an unquestionable bond are the ones in the innermost circle and the level of trust decreases with each outer band. There can be as many circles as needed, however, best practice is to stick to first five circles.

Working out the trust circle can help microfinance providers to get an insight of the networks of beneficiaries. There circles can be effectively used to understand the most trusted stakeholders and thus, a best way to connect with the beneficiary. This can be done through a focus group discussion where the participants are representative sample of their targeted group are requested to draw and identify the key stakeholders in their own trust circles.

I actively interacted with the microfinance beneficiaries in a recent fieldwork in three districts of Punjab and Sindh. Observations from there have provided an insight to a structure of the beneficiaries' trust circles. For example, a microfinance beneficiary is typically a female with limited education and access to resources.

The closest to her, the people she trusts the most are the other female beneficiaries in her neighbourhood. Given her culturally limited social space, she interacts the most with other females in her neighbourhood. They face similar issues given the similarity in location and socio-economic status. Therefore, one of the best ways to connect to new beneficiaries is through the existing network of women beneficiaries who can share the program details and address concerns with other women in their areas and recruit them exclusively based on the trust they share.

In the field, another important stakeholder that female...