“Customer centricity” is the new buzz in the microfinance industry. More and more financial service providers are recognizing that their success is built on the success of their clients. Customer centricity certainly means recognizing that financial inclusion is not just about more services – it’s about better services. To achieve this, financial service providers need to grapple with the complexity of clients’ financial lives, understand what appropriate design looks like, and empower clients to use those services effectively. But is it always a “win-win”? What if clients express preferences and make choices that are not in their long-term best interests – that is, what happens when what clients need isn’t what they might want or demand? And what if responding to client needs in the most appropriate way appears to be a riskier decision from the point of view of institutional financial performance?

Multiple lending is on the rise in Cambodia. Is this a problem, and if so how can we respond appropriately at an institutional, sector and government level?

For years the world has patted itself on the back about the rapid growth of Cambodia’s microfinance market. Over the past decade, Cambodia’s market has been one of the fastest-growing globally, recording a 127% portfolio increase between 2013 and 2014. Forty-five microfinance institutions (MFIs) now serve some 1.8 million borrowers, out of a total population of 15 million. In a country where the level of formal financial inclusion is negligible, this has looked like a notable success story.

What if your social enterprise provides a great product that helps lots of people, but also has some unintended negative consequences? 

“From day one, I was in debt. Two years on – I’m still behind on my payments, and really struggling to find my feet with my finances.”  

This is what we heard when recently talking to a tenant of a housing association. Taking up a new tenancy had thrown him into unmanageable levels of debt – a direct and unintended consequence of one social enterprise’s failure to see the big picture. 

No one can dispute that the housing association delivers social value in its core product – low-cost homes for vulnerable people. But a housing association is also a business; in these days of austerity there’s financial pressure to keep properties filled, in order to avoid lost income.