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Develop and Execute Strategy to Become Market Leader in Micro Banking
Background:
Indonesian micro finance market is very large, approximately three times larger than credit card business, with slightly lower risk and high growth potential. A major bank in Indonesia interested to capture the opportunity.
Solution:
Skha proposed a hybrid strategy, using two distribution channels to serve the micro segment: own micro outlet (direct channel) and linked micro finance institutions (indirect channel). Organization was designed to ensure effective strategy implementation. Key management systems were developed to ensure business targets achievement, manage risk, and minimize conflict potential between the two channels. To help achieve business targets, some quick win initiatives were also designed and executed.
Result:
Micro banking directorate was up and running. All quarterly targets were exceeded. The direct channel performed better than existing players in terms of growth and productivity. Client’s management was comfortable to set second year profitability target with return on assets more than twice the bank’s average.
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