ACCION International | Boston | Washington, DC | Bogota | Bangalore | Accra | Beijing

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Building Sustainable, Commercial Microfinance Programs

Market Intelligence for Microfinance
‡ Recognize customers and market perception to build brand awareness and image; ‡ Better understand desertion and delinquency, and improve client retention.

ACCION¶s Experience
ACCION has delivered market intelligence to many internal and external clients, ranging from studies in a specific country for a specific product or service² such as housing or customer service²to more complex, multi-country studies involving different products, such as remittances, urban individual credit and rural credit studies. Following are the market intelligence¶s modules: 1. Market assessment: The market assessment includes market analysis for new microfinance entrants or current actors who want to deepen their market reach. In addition, comprehensive analyses of secondary sources as well as qualitative and quantitative primary market research are performed. The resulting outcomes help support strategic business planning. Contextual information, competitor mapping, consumer needs and attitudes are taken into account to segment the market, to outline the potential market size and to provide market opportunities according to institutional competencies and objectives. 2. Value offer evaluation: To develop or improve specific products or services, this technical assistance focuses on understanding consumers in-depth²including their purchasing behavior and usage patterns, decision-making processes, critical values, attitudes toward the product offering and levels of satisfaction. The outcome will address the feasibility of cross-sell plans, retention strategies and customer satisfaction, among others. 3. Market segmentation: Given the vast population in the low-income market, more In response to the changing and increasingly competitive environment in the microfinance industry and the necessity to grow, microfinance institutions (MFIs) require extensive market data and intelligence to make investment decisions, develop sustainable competitive strategies and position themselves effectively in the market. Given these challenges, MFI executives are increasingly aware of the importance of market intelligence (MI), and many are adding it to their core competencies. It is important to distinguish between market research, which refers to the information gathering portion

of the larger market intelligence process, and market intelligence, which collects and integrates market data from secondary and primary sources that is then analyzed in an objective fashion. Of particular importance is the way the data is collected and analyzed given the microfinance context and the market in which the MFI works. ACCION is trying to help the industry evolve from research to strategy: The first step in developing successful business and marketing plans is to carry out market intelligence efforts. The MI team works closely with planning teams or project managers to support developing strategic recommendations or action plans.

Benefits to Microfinance Institutions (MFIs)
Specifically, market intelligence is needed to: ‡ Penetrate new markets and deepen reach in existing ones; ‡ Understand customer behavior with regard to financial services, and identify customer priorities; ‡ Identify market segments in the vast low-income market; ‡ Refine existing financial products and introduce new ones;
ACCION International | Boston | Washington, DC | Bogota | Bangalore | Accra | Beijing |

Building Sustainable, Commercial Microfinance Programs segmentation variables are needed to describe and focus the target market; the labels ³women´ or ³informal microentrepreneurs´ are too general as descriptions, given the market focus needed. Market segmentation helps MFIs identify each segment¶s attractiveness so they can combine this understanding with the MFI¶s relative competitiveness, ultimately enabling the MFI to provide a relevant product offering. This is often performed as the first step in a strategic planning process. To perform market segmentation, ACCION uses a systematic process with advanced qualitative and quantitative techniques such as consumer-belief dynamics, cluster and discriminant analysis to construct groups of segments. 4. Market research (MR): ACCION provides support to MFIs, project managers and companies who plan to carry out MR in the low-income markets with advice and supervision in any of the MR phases. - Definition & Preparation: Research focus establishment - Design & Planning: Determine which market research tool is most appropriate to solve the problem the MFI is facing; set terms of reference for MR firms and proposal evaluations.

- Implementation: Use the right tools and techniques²both quantitative tools, such as surveys and statistical analysis, and qualitative ones to understand consumer-buying behavior and ensure high-quality, reliable results - Analysis & Integration: Offer recommendations on the appropriate approach to carry out the analysis of outcomes

Contact Us
For more information about ACCION¶s market intelligence program, please contact: Jacqueline Urquizo ACCION International 1401 New York Avenue Suite 500 Washington, DC 20005 Tel: (202) 393-5113 Email: jurquizo@accion.org

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