Introduction
A win-win negotiation is a pact that benefits all the parties involved in an equal manner. As such, both the sides in the negotiation produce a pact that is workable and advantageous to them (DInnocenzo, 2011). This essay seeks to discuss a concrete case that involved a win-win negotiation.
Challenges Facing Microfinance Institutions
Most Microfinance institutions face similar challenges. Key among these challenges is the inability to reach new customers due to cost implications (Kumar, Claudia, & Sarah, 2010). Secondly, most Microfinance Institutions are unable to cope up with growing customer demands in areas where they are already established (Kumar, Claudia, & Sarah, 2010).
One of the best-known methods of solving such problems is adopting a money banking system commonly known as m banking. M banking refers to the process of conducting financial transactions by logging into the website of a financial services provider like a bank using a cellular phone (Gusain, 2009). It allows the subscriber to make withdrawals, pay bills, and check account balances as well as transfer of funds from one account to another (Gusain, 2009).
Tameer Microfinance Bank and Telenor Pakistan Negotiations
Tameer Microfinance Bank operates in Pakistan where statistics show that only 14 percent of the total population is banked (Kumar, Claudia, & Sarah, 2010).
Tameer needed to reach the unbanked through a relatively low cost method as putting up of structures and deployment of staff would be very costly (Kumar, Claudia, & Sarah, 2010). In addition, potential customers shy away from the banks either due to distances from the banks or the cost of banking. Telenor Pakistan is the second largest mobile network operator based in Pakistan.
Tameer really wanted an m banking platform to reach the unbanked population in Pakistan to increase its customer base and revenues too (Kumar, Claudia, & Sarah, 2010). The regulator in Pakistan made it mandatory for an MNO to come up with m banking services by collaborating with a financial institution (Kumar, Claudia, & Sarah, 2010).
In 2007, Tameer initiated negotiations with Telenor Pakistan with the aim of taking advantage of the over 30 million customers belonging to Telenor, its agent network of over 180, 000 and its national advertising and market presence (Kumar, Claudia, & Sarah, 2010). Telenor Pakistan needed a bank to collaborate with as per the regulations.
The following year, Telenor Pakistan bought 51 per cent shareholding in Tameer Microfinance Bank. They worked together to enhance m banking by creating the easypaisa brand money transfer service.
Problems Overcome: Win-Win
The negotiated partnership enabled Tameer reach new customers in an easy way. Secondly, Tameer Microfinance Bank is able to afford convenience to existing customers by reducing the cost of doing business since they do not have to go the branches but can access financial services from the comfort of their cellular phones.
On the other hand, Telenor Pakistan has increased its Average Revenue Per User (ARPU) and hence continued growth at Telenor Pakistan (Kumar, Claudia, & Sarah, 2010). ARPU is a measure of revenue used by telecommunications companies.
The partnership has also enabled Telenor Pakistan new sources of revenues since it charges a premium for the m banking platform (Kumar, Claudia, & Sarah, 2010). Just like Tameer Microfinance Bank, Telenor has afforded convenience to its existing clients since they can access banking services through their cell phones (Kumar, Claudia, & Sarah, 2010).
Conclusion
Tameer Microfinance Bank and Telenor Pakistan thus reached a win-win situation as they collaborated to solve the problem of a large unbanked population in Pakistan. Both benefitted from the partnership as does their respective customers.
References
DInnocenzo, L. (2011, May 31). Sales Skills Development Blog. Web.
Gusain, P. (2009, August 26). Mobile Banking-Definition and advantages. Web.
Kumar, K., Claudia, M., & Sarah, R. (2010). Microfinance and Mobile Banking: The Story So Far, Focus Note , 62.