‘Financial Action Learning System’ (FALS) integrating client financial empowerment, product market research and social performance management into a responsible finance partnership between clients and Financial Service Providers.’
What is Financial Action Learning for Sustainability?
The original PALS work with the micro-finance sector and financial service providers also continued focusing on client financial empowerment as a necessary and integral part of Responsible Finance, linking with participatory market research, social performance management and client protection.
FALS adapts simple proven tools from the generic Participatory Action Learning System (PALS) empowerment methodology to integrate:
- Client financial empowerment methodology to enable women, youth and men clients to effectively plan how they will best use and benefit from financial products – and become financially responsible clients. FALS Tools also enable clients to share and upscale good financial management and planning practices with other clients and potential clients, ultimately becoming a sustainable network of community financial advisers and therefore an integral part of business expansion.
- Participatory Social Performance Management integrating client-identified empowerment indicators not only to ‘prove impact’, but to identify which specific products and services and/or design elements are most effective in delivering benefits to clients. SPM therefore becomes an integral part of product development, rather than an add-on for donor recognition.
- Responsible product design and market research based on information from SPM and use of FALS planning and analysis tools with groups of clients from different backgrounds to discuss potential improvements to products that could increase their usefulness to clients and also be profitable for FSPs.
This integration allows the development and sustainable implementation of:
- Responsible Finance Memorandum of Understanding (RFMOU) between clients and FSPs integrated into application processes for loans and other services. This is the core tool in the form of a pictorial Financial Management Calendar based on mutually agreed Client Protection Principles and the understanding that sustainable client empowerment also requires profitability of the FSP (whether commercial or member-owned) to continue to develop and deliver quality products and services.
All these client-led inputs form the basis for a parallel process at all stages of:
- Organisational Visioning, Planning and Capacity Building using the same tools within organisations and integrated into staff training enable clearer organisational understanding of responsible finance strategies based on the realities of clients, including women and youth. This leads to better decision-making and communication at all levels.
FALS originated in use of PALS tools as part of participatory gender mainstreaming with MFIs in India (sponsored by ANANDI and CERMI), Bangladesh (CAFOD), Nepal (PACT) and Pakistan (Aga Khan Foundation) 2000-2006, followed by work with MFIs in the Latin America Micro-finance Networks in Central(Nicaragua, Guatemala, Honduras and Costa Rica) and South America (Peru, Ecuador, Colombia, Bolivia) for SNV, Hivos and Oxfam Novib and Sudan with LEAP-PASED. It also build on work in Uganda with the Microfinance Associations of Kabarole Research Centre, Trickle-Up US and savings and credit members of Bukonzo Joint Cooperative Union.
Under Oxfam Novib’s WEMAN programme in 2007 a preliminary draft concept note was developed for FALS as a system. The latest version of this concept paper was produced for IFAD:
FALS was further piloted in Philippines with Oikocredit, NWTF and ASKI and funded by Church of Sweden:
For discussions and materials on gender and microfinance see:
- Gender mainstreaming in financial services
- Mayoux, L. C. and M. Hartl (2009). Gender and rural microfinance: Reaching and empowering women: Guide for Practitioners. Rome, IFAD.