Professional Documents
Culture Documents
Trainers Manual
Planning Conducting and Monitoring
Pilot Tests
(Loan Products)
Based on
April 2004
Trainer’s Manual Planning, Conducting & Monitoring Pilot Tests - Loans 1
Acknowledgements
Evelyn Stark prepared much of this Trainer’s Manual. Elsie Mukasa did much of the layout and design
work on the manuals and workbook and additional editing work was done by Benjamin Eaglin. Greta
Greathouse put together the PowerPoint presentation.
This good work was then taken by the MicroSave and subjected to additional editing and extension.
This training manual needs comments from trainers to provide additional training tips, examples and
ideas! Your thoughts and comments are anticipated and welcomed for the next version.
Table of Contents
Acknowledgements ....................................................................................................................... 1
Session Nine: Step 6 - Documenting the Product Definitions & Procedures ........................ 75
Session Eleven: Step 8 - Developing Customer Marketing Materials and Methods ............ 93
Session 12: Step 9 – Launch: Commencing the Pilot Test .................................................... 106
Session 13: Step 10 – Monitoring and Evaluating the Test ................................................... 110
Trainer’s Guide
Welcome to the MicroSave Planning, Conducting and Monitoring Pilot Tests Training Curriculum.
This guide is meant for those people who have taken the MicroSave Pilot Testing training course and are
going to reproduce the training elsewhere – or are going to “live it” by piloting a new product within
their own organisation. The guide provides comprehensive session plans and also offers the experiences
of some of our research partners, staff members and trainers who have used the information herein to
pilot test new products.
It is intended that the trainer delivering this course will be familiar with pilot testing as well as being a
capable trainer. However, for those who may want to brush up on their training skills, there is an
accompanying manual (or Microsoft Word file on CD) specifically discussing training skills and training
issues. There are many other training manuals which the trainer may consult, including the
“Participatory Learning & Action: A Trainer’s Guide” of the IIED Participatory Methodology Series. 1
Several of the “Ice Breakers, Refreshers, etc.” come from these manuals.
There’s already a Pilot Testing Manual on the MicroSave Website. Why is there a training
curriculum also?
Some people will read the Pilot Testing manual that is on our website and find that to be enough for their
organisation to go forward with a pilot test. However, we have had many people and organisations who
asked for a training course as well. Some people feel that it is faster and easier to train all the members of
a pilot test team in the pilot testing process at once. This way they will literally all be “reading from the
same page”.
Training individuals:
It will be more difficult to provide this training to many individuals from many different organisations. If
this is the case, the training should be handled more like a Training of Trainers as these individuals
should be responsible for taking back the information to their organisation in order to train up the Pilot
Testing Team and management how to plan, conduct and monitor a pilot test.
1
They can be reached at International Institute for Environment and Development/ 3 Endsleigh Street, London, WC1H ODD, UK
amount of information “lost” in the long delay between the training course and an actual product to be
tested dictates that this training follows directly on an actual product development process.
In addition, the participants must bring with them laptops that ideally have been loaded with all the
information that they may need. This will include, among others, contact lists, product information for
the new product being tested, financial projections (as much as may have already been done, and possibly
with as much detailed costing information as the organisation is comfortable providing) etc.
What do I need from MicroSave for the Training?
These manuals are intended to be utilised with several accompanying documents, all of which are located
on the MicroSave resource CD or website www.MicroSave.org .
Manuals:
Participants’ Manual:
MicroSave’s Planning, Conducting and Monitoring Pilot Tests manual.
Participants’ Workbook:
The planning workbook is a short, step by step guide for participants to ensure that they plan,
conduct and monitor the pilot test in the most efficient and effective manner. The workbook
provides matrices, examples and checklists for each step in the pilot test process. The trainer
should make sure that the workbook can be downloaded to the participant’s laptops (or sent via
email).
Extra Material for Participants:
Handouts:
An electronic folder of handouts is included. It should be
noted that several of the handouts are in a Workbook that
is designed to help participants leave the training with
much of the initial planning for the their pilot-test
completed. Ideally all handouts should be made available
in soft copy so that they can be used by participants when
they return to their institutions. Whenever possible,
participants should bring their own computers so that they
can complete this initial planning on their own machines.
Exercises:
An electronic folder of handouts is also included. These
are primarily for the financial projection exercise (on an
Excel spreadsheet) and computers are essential for running
this exercise.
Practical Examples
Practical examples have been provided throughout the course based on the experience of MicroSave with
its Action Research Partners. The trainer should review the practical examples and where possible
supplement or replace the examples given on the basis of his / her experience.
Providing examples based on experience adds considerable value to the course, especially where
examples are contextually and culturally appropriate for those being trained.
• Standard Training Room items: flip chart stands, flip charts, marker pens of various colours, hole
puncher, stapler, masking tape, etc.
• Workshop materials for participants: Encourage them to take notes in their manuals (so pads of
paper may not be needed) so they will remember the discussions better when they get back to their
offices. However folders will be helpful considering the number of handouts and exercises that
there will be during the course. It may be helpful to have pens, pencils, erasers, etc.
• Computers (ideally 1 for every 3-4 participants) to run the exercises. Participants should be
encouraged to bring their own computers to allow them to complete much of the initial planning
for their pilot-tests on their own machines.
Each session provides the Trainer with the Session Objectives, Time, Methods, Materials, Overview
and Process.
• The time that each session will take is flexible depending on the trainer, the number of participants,
skill levels of the participants and whether or not the participants are all from the same organisation
or from different ones.
• The methods simply alert the trainer as to whether the session is to be conducted as, for example, a
presentation – which generally means the slideshow will be utilised, or as a breakout session and
that breakout areas may be required.
• A list of all the materials that the trainer will need, above and beyond the list provided above, for
the session is also included. Flipcharts, markers, tape should be assumed, even when not listed.
• The overview provides just that – an overview of the upcoming session, and
• The process section provides the trainer with the steps they should follow to train each session.
The process sections of the trainer’s manual will often have greater detail on the subject matter than
the participants’ curriculum, and training tips may be included. It is not intended that the trainer
memorises the text (then we would have added some of our standard jokes!), but rather that the
trainer feels confident discussing the issues at hand. The trainer should bring in relevant examples
from her own MFI experiences and encourage participants to discuss their own experiences.
Adults generally learn better from “real life” rather than theoretical discussions.
Finally, the trainer will find the following SYMBOLS in the manual to signify different things.
The idea symbol means that you will find comments from our
experienced staff and certified trainers. More comments, questions and
Idea: ideas can be directed to MicroSave, their research partners or their
trainers by using the e-mail addresses on the front of this manual, or
accessing the website.
This symbol helps the trainer find the exercises that are in each session.
Also, when printing out the slides you need to be careful to uncheck the box that says “Print
Hidden Slides.” Otherwise all the slides will be printed for your participants and they will have a
difficult time following your presentation (because you will skip over several slides).
It is not recommended that the training be compressed into a very short time period nor overly extended.
The “Days” have been calculated to allow the team plenty of time to work in detail on their MFI’s own
needs for pilot testing. Compressing this time may lead to confusion, and extending it may mean that the
group is spending too much time in an “academic” setting and not enough time “doing it”.
Time: 30 minutes
Methods: Presentation
Handouts:
• Handout 1.1 Timetable
Overview: This session welcomes the participants to the course and gives them an idea of
what to expect over the next three days.
1. Opening Remarks
Time: 5 minutes
Slides: 3 (including 2 introduction)
Welcome participants and introduce facilitators
Read the session objectives – as you will do in each of the sessions. The slideshow will guide you on
this, as well.
The trainer may choose to add/subtract ground rules from the list on the Power point show.
The trainer may ask the participants what their expectations are for this course. However, as the selection
process should be quite rigorous, the participants should know what to expect – and be ready to start
working!
2
The authors is indebted to staff and management of the Kenya Post Office Savings Bank, Tanzania Postal Bank, and the Elgon Cooperative
Society Limited, FINCA Uganda and Equity Building Society, Kenya at which institutions this methodology was extensively discussed and
applied to their product testing process.
Course Overview:
This course will be covering the various stages of planning, conducting and monitoring a pilot test. We
have broken the pilot test process down into ten steps, and we have arranged the training sessions along
the ten steps. We will have an exercise in each of the sessions to ensure that we all understand the
concepts being discussed. Participants can choose to work on a loans or savings product (especially if
they have brought the actual product information which the MFI plans to pilot test after this training).
The trainer should ensure that the participants realise that the lessons in this course will apply to a broad
range of microfinance products, not just the specific one being tested today.
The ten steps of pilot testing are shown in a flow chart/diagram on the following page. We will be going
into each of these steps throughout the course, and we will be going Introducing Pilot Testing in more
detail in the next session.
Do not go into detail here, this will be gone over in much more depth in
the next session, and then in detail step by step throughout the training.
For now, let us simply look at the flow chart and realise that at the end of these steps (Step 10:
Evaluation), the pilot test team will have to make an important decision:
Either the pilot test has shown that the product is successful and we will roll out the
product to our other MFI branches….
However, pilot testing is rarely that smooth. In many cases, we will discover upon evaluation that there
are changes that need to be made in the product, putting us back into the middle of the process (re-doing
the financial projections, making some changes to the delivery mechanisms, re-training staff in how to
market and deliver the product, etc.).
By following these steps, your MFI will be able to control the process of pilot testing. It enables full
participation, the potential for rapid trouble-shooting, effective and efficient feedback, and professional
management of the product.
We suggest that management read through all the steps carefully before beginning the pilot testing
process.
Use the Workbook (or make photocopies of the worksheets) as you go along, modifying, where
necessary, for your institution’s particular needs. Use the checklists (in the manual and the workbook) at
the end of each step to be sure you have covered all the steps completely. Once the pilot testing team is
formed, members will generally be assigned to different steps for completion.
Some steps or parts of steps must be completed before others. For example, you need to know generally
what systems your institution will use before you can complete the projections. But, you would not buy
the required fixed assets until the time when you had to in order to have them in place one month prior to
the planned test commencement date. During this time, several other steps would have been substantially
completed.
Continuously
10.
5. Modeling the
Evaluate the Pilot Financial
T es t Projections
9.
Commence
the Product 8. Develop
Test Customer 7. Train the 6. Document the
Marketing Relevant Staff Product
Materials Definitions &
Procedures
Time: 45 minutes
Methods: Presentation
Handouts:
• Handout 2.1 Briefing Note # 14: Systematic Approach to Product
Development
• Handout 2.2 10 Steps of Pilot Testing (Workbook)
• Handout 2.3 Briefing Note # 9: Questions that should Precede Product
Development
• Handout 2.4 Briefing Note # 24: Lessons from Pilot-Testing
A “test” is defined as something that measures the worth of a person or thing by trying it out, or an
examination of a person, substance, material or system.
Combining these two words, we can say that a pilot test is something that measures the worth of a thing,
in such a way that the test itself acts as a guide. When applied to a new product or service, a pilot test is
something that measures its worth on a limited scale and scope so that the results of the test guide
management decision-making about a broader rollout of the product. By pilot testing a new product
before rollout, the company avoids errors on a large scale that could be corrected based on the lessons
from the small-scale test.
Take shoes, for example. At Acme Shoes, market research showed that customers wanted yellow canvas
shoes with rubber toes. But, before the company commences manufacturing 2 or 3 million pairs, they
want to be sure that the shoes will sell and make a profit. So, the company runs a “pilot test.”
All this is done to see if the new product is worth producing on a larger scale.
Acme manufactures 1,000 shoes, trains the sales people in one store (limiting the geographic area) and
starts selling them at a carefully calculated price. The store manager collects data on the sales.
From its pilot test, Acme Shoe management wants to know several things:
• Will customers buy and wear yellow canvas shoes with rubber toes (or will they buy only Acme’s
traditional leather shoes)?
• Is the new shoe profitable? How much will customer’s pay for yellow canvas shoes with rubber toes
(is it enough to cover all costs plus yield a profit)?
• Do these yellow canvas shoes with rubber toes satisfy customer desires?
• Are the shoes of good quality? Do they hold up to consumer use?
Throughout the testing period, data is collected and analysed. Through ongoing refinement of the shoes
during the pilot test, the company becomes reasonably knowledgeable about the likely market response
to the shoes, and should have maximized the potential for market appeal. By the end of the testing period,
the company will be able to make a reasonable and educated decision about whether or not to launch the
product on a larger scale.
Without a pilot test, the company could end up manufacturing 2 million pairs of yellow canvas shoes
with rubber toes, only to find that there was no market for them.
Market research may have shown that your Microfinance customers want a new savings – or loan -
product. The product has been developed from concept to prototype, and the prototype has been refined.
But it is important for institutional management to know if this new product is something that the
customers will really use, with terms that result in a net positive yield to the MFI.
Your bank or MFI can gather this information through designing, conducting, monitoring and evaluating
an appropriate and effective pilot test of the product – a test that will accurately measure customer needs
and desires, and will produce the information needed for effective institutional decision making.
3 These testing prices would be calculated based on large volume projections with an amortization of research and development costs. They
would not try to recoup the cost of R&D and manufacturing of a small lot in the price of that first batch of product.
The further you go down the wrong path, the more expensive it is to correct the mistakes. Take this
example of a major electrical product. In this case, the cost of errors in each stage of product
development is a factor of ten. 4
The earlier problems are detected, the lower the cost of correction
will be for the institution.
Each product in each industry will have a different cost factor as one moves along the process of mass
provision of a product, and certainly this factor will vary from market to market and
product to product. The key is to recognise that the more control a company has at each
stage of product development, the better it will be able to minimize its costs.
2. The Product Development Process and the Ten Steps of Pilot Testing
Time: 15 minutes
Slides: 3
Following recent developments in understanding the needs of clients and the growing competition
amongst microfinance institutions (MFIs), and in the light of growing numbers of “drop-outs” or “exits”
from MFIs’ programmes, there has been increased interest from MFIs in improving their product
development skills. Developing MFIs’ capacity in market research is the first, all-important step. The
qualitative skills and tools in this workshop can also be used for a wide variety of activities that are critical
for a successful MFI. These include:
• Developing new products and modifying old ones,
• Understanding clients and their perceptions of the MFI and its services/products,
• Developing/refining marketing programmes,
• Analysis of clients’ risks/vulnerability opportunities and how people use (formal and informal
sector) financial services,
• Understanding the “financial landscape”, or environment, within which the MFI is operating,
• Analysing problems such as drop-outs and growing trends loan default,
• Impact assessment and evaluation,
• Analysis of relative depth of outreach,
• Detecting fraud/rent-seeking, and
• Running strategic planning/staff meetings.
4
Willard Zangwell. Lightning Strategies for Innovations, (New York: Lexington Books, 1993). p. 9.
• MFI clients, colleagues, management or other sources may have identified a problem or
opportunity and thus developed a research issue.
• Market research is done to clarify the issue and identify potential solutions (using qualitative
research).
• A concept is born, discussed and costed/priced to see if it is really worth developing.
• If management and clients deem the concept worthy of further exploration, they refine the
product concept into a product prototype expressed in clear, concise, client language.
• The prototype is tested for potential demand and pricing elasticity (using quantitative research).
• From this evolves a product prototype ready for pilot testing.
See Handout 2.1 Briefing Note # 14: Systematic Approach to Product Development
Exercise
Cut out and shuffle the different steps under the Exercise 2.1 “Select and Order Ten Steps of Pilot-
Testing” so that you have 17 slips of paper/card. Split participants into groups and give then the slips of
card asking them to:
1. Identify the ten steps necessary to conduct a systematic, well-prepared pilot test (putting the
other 7 slips to one side) and then
2. Put the ten steps of pilot-testing into the order they should be implemented.
Note: This will cause much debate, as several of the steps are iterative (e.g. you cannot set many
objectives until you have completed the financial projections, but you need some of the initial objectives
to frame the assumptions in the financial projections) … Reassure the participants that there is no
absolute right or wrong answer, but that the process of discussing the steps and thinking about the
implications for their own organisations is important.
Continuously
10.
5. Modeling the
Monitor and Financial
Evaluate the Pilot Projections
Test
9.
Commence
8. Develop
the Product
Customer 7. Train the 6. Document the
Test
Marketing Relevant Staff Product
Materials Definitions &
Procedures
The Pilot Testing Overview in the previous diagram shows how the product testing process
flows from a test-ready product through testing and feedback.
We’ll get to the details of all of the steps, but let’s look quickly at the Steps.
We review feedback (from clients, from staff, from Management, from MIS, accounting systems, etc.)
against the objectives we have set for this product. The result of the review indicates what should happen
next.
In many cases, the feedback shows that the product does not meet the objectives. This is the most
common scenario!
In a savings product, this might mean that the interest rate must be changed, or the forms must be
altered to make them easier for customers to complete or the marketing of the product inside the office –
to staff - needs to be improved.
In a loan product, growth may be significantly slower than projected. This might call for an adjustment
to the method for determining initial loans, or a change in the application process to make it more
customer-friendly, or changing the size of the groups to better fit the local culture.
Adjust and Test: When the feedback indicates that the product does not meet the objectives, the product
must go looping back through the process of (4) financial projections, (5) systems adjustments, (6)
product definitions, (7) staff training and (8) marketing. Feedback after adjustments may still show some
problems. The product must be refined until all the objectives are met.
• Roll out: Once the product finally meets the objectives, the product can be considered successful
and it can move on to the roll-out phase. This hardly ever occurs the first time through the Pilot
Test.
• Terminate: There are times when, no matter how much adjusting the institution does, the
product simply does not satisfy the objectives. Most often such a product should simply be
terminated. The feedback step is critical to making any decision about the future of the product.
After the product is rolled-out, the institution should continue to collect data and feedback from clients
and internal sources. Feedback will help management to further improve the product over time.
1. Motivation: Are we starting product development to make our MFI more market-driven?
2. Commitment: Are we setting about product development as a process?
3. Capacity: Can our MFI handle the strains and stresses of introducing a new product?
4. Cost Effectiveness: Do we fully understand the cost structure of our products?
5. Simplicity: Can we refine, repackage and re-launch existing product (s) before we develop a new
one?
6. Complexity and Cannibalisation: Are we falling into the product proliferation trap?
The process of risk analysis and management has been explored and developed in the Shorebank /
MicroSave Toolkit for Institutional and Product Development Risk Analysis for MFIs, as described on
the following page.
A Pilot Test can minimize the risk of financial loss to the institution and the clients:
“We offered the loan product at a price lower than our competitors… but then we found out that we
were losing a lot of money. We should have pilot tested it in one branch first”. (MFI manager)
It can also guard against reputation risk:
“They said they could operate savings accounts, but they are hopeless. I am taking my account
elsewhere and so should you”. (Unhappy client)
It’s also important to ensure that you can minimize potential loss of control of the Test and provide
valuable information that management can use to improve the product.
5
See Looking Before You Leap: Key Questions That Should Precede Starting New Product Development (Wright et al.) for more details
Proactive risk management is essential to the long-term sustainability of microfinance institutions (MFIs).
This toolkit presents a framework for anticipating and managing risk in microfinance institutions with a
particular emphasis on new product development. The toolkit is tailored to senior managers who play the
most active role in setting the parameters and guidelines for managing risk.
There are two parts to this toolkit. Part 1 lays out a general framework for identifying, assessing, mitigating
and monitoring risk in the MFI or bank as a whole. The document emphasizes the inter-relatedness of risks
and the need for a comprehensive approach to managing them. Establishing a comprehensive risk
management control structure in a financial institution is a necessary precondition to effectively managing
risks related to new product development and roll-out.
Part 2 focuses on risks inherent to new product development and suggests tools to help manage the process.
The toolkit’s approach to managing risk in new product development and roll-out is, by intent, conservative
and time-consuming. However, sometimes it will be necessary to fast – track certain steps or maybe even
take the risk of leaving some steps out for the hope of a greater gain down the line. However, ShoreBank and
MicroSave caution against too much haste in rolling out new products. Being first in a market with a new
product is not a sustainable competitive advantage. We recommend following and/or adapting all the steps in
MicroSave’s product development process to suit your organisation’s needs, and complementing it with the
risk mitigation tools provided in this toolkit. Managers should always weigh the costs of leaving out
particular steps against the benefits that they might yield in preventing unnecessary cost and product failures,
or increasing opportunities for new product successes down the line.
All this should be completed before significant funds are expended on the new product development
process, and certainly before the institution enters the Pilot Testing Phase.
6
Adapted from Monica Brand. Guide to New Product Development Institutional Diagnostic. Early draft. USAID/MBP
Materials: Slide Show: “Session Three” This session consists of approximately 10 slides
(including 1 introduction)
Where the new product is a refinement of an existing product: Where the product is a refinement of
existing products it is often not necessary to pilot test the modification, as long as the modification has
been properly researched and does not require major systems modifications. In October 2001, Equity
received training in Market Research for Microfinance. During market research Equity discovered that
although their clients were positive towards Equity that they strongly disliked the pricing of Equity’s
products. Interest rates were expressed as declining balances, which were frequently misunderstood by
potential clients. Furthermore, Equity imposed a range of small charges, which were not clearly
communicated to clients, such as fees for photocopying or administration. In response to client criticisms
Equity simplified their fee structures, and clearly communicated the new fee structure to clients. Client
reactions were very positive.
Where specific technical expertise is purchased: Instead of performing extensive market research and
pilot testing a new housing loan. Teba Bank purchased housing loan expertise, by bringing in a team of
professionals who had existing experience of offering housing loans in Teba Bank’s market.
Where the product itself is low risk: Akiba Commercial Bank in Tanzania developed a successful salary
loan product without pilot testing. For a commercial bank in East Africa, a salary loan product has
become a “hygiene factor” - a commercial bank is expected to have a salary loan product with terms and
conditions that are broadly similar to those of competitors. Secondly, salary loans are relatively low risk
as employees frequently have a financial history with the institution that can be used to assess repayment
ability, and the salary loan is usually secured against terminal benefits.
However, for every product that is successful without a pilot test, there are many products that could
have been improved with a pilot test. Several examples prove this point:
Example 1. Tractor Loans: A South African bank saw that there was a high demand for tractors and
decided to launch a Tractor Loan. Policies and procedures were developed, a 30% down payment was
required, with 140% security, and repayments were seasonal to ensure that farmers could repay the loans
from seasonal income.
What happened? The loan was very popular, but ultimately failed. Many of the loan recipients were
retrenched workers who used their redundancy payments to purchase tractors. Retrenched workers failed
to understand the agricultural market. Loans financed second hand tractors, which proved difficult for
customers to maintain. Tractors broke down and were gradually cannibalised for parts, without an
income borrowers could not repay their loans. The bank found that it had insufficient staff to perform
extensive field based follow up once problems started to emerge.
Example 2 Too much success: Uganda Women’s Finance Trust (UWFT) was experiencing high levels
of dropout and higher than acceptable levels of default. Using MicroSave market research techniques,
UWFT made the decision to modify its loan products. Loan terms and amounts were increased, loan
qualification periods were decreased and individual assessment of loans was introduced. Client response
to the changed products was enthusiastic. In three months the portfolio outstanding increased by 50%.
However, UWFT were not prepared for the rapid expansion in their portfolio and Portfolio At Risk
rapidly increased. After this experience, UWFT management feel that major changes to products should
be pilot tested, for several reasons; firstly, to ensure that the impact of changes to the product on the
demand for the product can be properly tracked; secondly to allow the development of appropriate
capacity and skills prior to the rollout of the product; thirdly to determine and plan for higher level
institutional impacts such as liquidity, funding, changes in corporate image etc.
Example 3 Changing Focus: When a financial institution changes its product focus, structured pilot
testing becomes critical. Tanzania Postal Bank wanted to develop a micro-finance loan - it launched a
small-scale, unstructured pilot test, which went reasonably well. However, as it rolled out the product the
bank realised that its policies and procedures were not adequate, staffing levels were too low, and staff
were not sufficiently knowledgeable in micro-finance monitoring. The bank is now addressing these
problems.
Example 4: Copycatting: A common way to reduce the risk of new products failing to meet the needs of
the local marketplace is to copy successful products developed by other financial institutions. However,
this too can be dangerous. Federal Savings a Cooperative based in Bangladesh tried to duplicate the
innovative products of Safesave, which was successfully operating in Dhaka slums. However, although
Federal Savings could copy the features of the product it could not duplicate the organisational culture,
careful management and precise reporting systems that underpinned Safesave. With popular products,
Federal Savings expanded rapidly became dangerously undercapitalised and eventually collapsed.”
Exercise
Participants split into groups and consider the following questions. Time for exercise 15 minutes with 15
minutes for presentations
Overview: This session starts participants on the Pilot Testing Process. They should be
thinking about how they are going to organise their pilot testing team within
their own organisations.
Your MFI has determined through market research using surveys, focus groups or Participatory Rapid
Appraisal (PRA) that a new loan or savings product is needed, and has developed a product concept
management believes will satisfy that need.7 Key management and staff, perhaps even with the Board of
Directors, have ascertained key features for this product and have a prototype design of how they want it
to look and act. Now is the time for a Pilot Test Team to be organized, and the pilot testing process to
begin.
7
This is commonly done in the research and design phase, which is preparatory to the pilot testing phase. An excellent guide for this research is
MicroSave’s “Market Research for Microfinance.”
In a large MFI, the person who puts together the Pilot Test Team may be the head of Research or the
head of Marketing. In a very large institution it may be the head of New Product Development. In a
medium-sized or small MFI it might be the Managing Director, Credit Manager, or a member of the
Board of Directors.
Oftentimes the central person drawing the team together is the “Product Champion.” This is the person
with excitement and energy for the product who will pull it through all the problems and push for its
success. The Product Champion also frequently serves as the “Team Leader” who must be prepared to
lead his/her team, much like the Captain of a Football Team, through all the steps of pilot testing the
product. S/he must be able to recognise the value of each Team member and maximize Team
contributions for the value of the product and ultimately the company.
If your MFI has three to five key employees, then probably all of them will have roles to play and tasks
to accomplish in the pilot testing process, and collectively will make up the Pilot Test Team. If your MFI
is very large, then as many as ten key people may come together as the Pilot Test Team. Too many
people on the team may hinder, rather than help, the process.
What is most important is that the composition of the Team represents all major
departments of the MFI, and is thus a representational Pilot Test Team.
• Guidance: Team members provide guidance to the Team in their respective areas of expertise within
the MFI. A Team composed of a cross-section of institutional management will be able to address
most of the likely problems of the test either prior to the test, or as soon as problems arise.
• Assistance: A representational Team means that there will be someone in each department who
understands the product and will be able to assist within the department whenever related issues
come up.
• Ownership: A representational Team can help to generate institutional ownership and enthusiasm
for the product throughout the organisation.
They should have a formal Terms of Reference (TOR) that clearly defines their role, and a Senior
Manager or Board Member – someone who is not a member of the Pilot Test Team – should informally
supervise them. A sample TOR is provided in Handout 4.3.
The TOR clarifies the role, responsibilities, and authority of the Team, gains top management support for
the test, and gives the Team clarity on what resources will be required and made available. There should
be a formal meeting and communications schedule, as well as a contact list for each Team member.
Finally, the TOR should identify the Team Leader, who is likely to be the Product Champion.
For example, without someone skilled in finance and accounting, it will be difficult to adequately
develop the projections for the new product.
All members of the team have other work to do and therefore the level of effort should not indicate that
they are “full-time” devoted to this project alone. For example, Imelda’s level of effort is 24 days, but
they are spread over a much longer period. In fact, it is expected that on average she will put in 3 hours
per day (a little over 2 days/week), though during the planning phase she will be putting in much more
time, and then reducing her time significantly once the pilot test has begun and is in the monitoring
stages.
If your MFI is very large, then a sizable pool of potential Test Team members with the necessary
expertise probably exists within the institution.
The skill areas listed in the table above are all the basic skill areas needed for a savings or loan product.
You should supplement the core team with people who have additional specific skills if those skill areas
are required for a particular product.
See Handout 4.1 (in the Workbook) allows participants to create own charts for their Pilot Test Team
Skill Areas.
For example, the Team will need to develop a procedures manual for the product. It would be unwise for
the Team to simply inform the Director of Operations (a non-team member in this example) to have one
prepared. First, only the Team members know the full details of the product in order to fully address the
various activities of the Test. Second, only Team members are responsible (as per the TOR) for the
outputs of the Test.
Some of the specific activities for which Team members might be responsible include:
Example of Team member Specific Activities:
Pilot Test Team Skill Areas Specific Activity
Manages the Team, responsible for reporting and outputs, calls meetings, assigns tasks to
1. Product Champion/Team Team members, and represents the team to top management, coordinates recommendation
Leader letter.
3. Information Coordinates IT selection and installation, related fixed asset purchasing and installation,
Technology/MIS systems manual development
Prepare marketing plan for test, test product marketing training, coordinate development
4. Marketing of marketing documents, track marketing effectiveness
Write curriculum for test product training, train front and back office related staff
5. Training
Develop policies and procedures documentation
6. Operations/Management
Provide frontline customer information to Team, distribute and collect new customer
7. Operations/Frontline information sheets
Collect and summarize data, prepare monthly and quarterly reports to Team and others
8. Research
Assist in formalization of procedures, authorize procedures, conduct full product audit
9. Audit/Controls (and follow-up if necessary) during test
Q: Our MFI is not very large. How do we manage to have all skill
areas represented on our Pilot Test Team?
This is more challenging in small or medium-sized MFIs. In these cases, there may be few available
personnel and your Team may consist of only three to five individuals, each of whom will have to cover
more than one skill area on the Pilot Test Team.
But remember it is important that the individual fulfilling a Pilot Test Team skill area have the needed
expertise.
In a small or medium-sized MFI, where a Team is small and Team members are fulfilling more than one
skill area, there may be skill areas for which no one on staff has the necessary expertise. In this case, the
Team will have to determine the particular need for that skill area and the abilities of the rest of the
Team. If these skills are deemed necessary and unavailable within the Team, you may be forced to obtain
these skills elsewhere.
For example, the chart may look like this, with the Marketing and Research component left un-manned.
Expected Level
Pilot Test Team Skill Areas Individual/Contact Title
of Effort (days)
Mary Musoke CEO 40
1. Product Champion/Team Leader
043-987-654
K Bartley Accounts Manager 32
2. Finance/Accounting
043-987-651
3. Information Technology/MIS K Bartley Accounts Manager
4. Marketing
5. Training Mary Musoke CEO
6. Operations/Management Mary Musoke CEO
David Onyango Credit Manager 18
7. Operations/Frontline
043-987-652
8. Research
9. Audit/Controls Mary Musoke CEO
As expertise in all of these Pilot Test Team Skill Areas is critical to the success of the new financial
product, then the team must obtain it elsewhere. Possible sources of this expertise include:
In the above example, therefore, two Board members might step forward to fulfil Skill Area 4:
Marketing, and Skill Area 8: Research, given their experience and knowledge in these fields.
You will find copies of these tables in the Workbook. Make a checkmark in the right-hand column when
the participation of the individuals listed in the second column has been confirmed.
Note that regardless of the size of the institution or the complexity of the product, participation on the
Team is only an occasional activity – more frequent at some points, less frequent at others. Also, the
larger the Team, the less of any one person’s time is required since the duties will have been more finely
distributed.
Different members of the team will have different levels of commitment, with a few team members being
heavily involved and others less so.
8 Hiring consultants and University faculty, for example, can be expensive. It is prudent, when generating a Board of Directors for a
Microfinance Institution, to be aware of potentially needed expertise so that the combined knowledge of Board Members can be drawn upon
(though, it must be remembered that Board Members are also busy in their other work as well).
It may, or may not be a full time job for any one person, BUT it does require concentrated efforts of
many individuals within an institution. Any company embarking on the development of a new product
needs to dedicate substantial resources to the process.
• The Pilot Test Team, including senior management, will need to meet frequently before the pilot test
starts probably weekly, after the pilot test starts the team should meet at least monthly (sometimes
more frequently) to review the pilot testing process.
• Senior/middle management members of the Pilot Test Team and their staff will have to take the time
to analyse costs and make pricing calculations
Allow: around 5-10 total person-days of the finance area representative and others
depending on the state of the cost accounting system.
• Senior/middle management members of the Pilot Test Team and their staff will also have to take the
time needed to plan, conduct, and monitor the Pilot Test.
Allow: around 40-80 person-days over the 6 – 12 months of the test depending on the nature
of the product, extent of revision to systems, and other particulars of the product, the MFI,
and the market .
Parts of the process may have to be repeated depending on the results of the Test itself. If this is the case,
it may be necessary to continue running the Test past the planned termination date.
MicroSave’s action research partners spend a lot of time testing. Some have marketing/research
departments tasked to do the pilot testing, while others simply task other staff members.
Either way expects to spend a significant amount of time – especially the first time you do this!
These are broad timing estimates. New products often require substantial adjustments to operating and
management information systems, and Pilot Tests sometimes reveal important issues that require
intervention.
Many MFIs realise that their MIS (and other systems!) needs significant changes in order to
accommodate a new product that may have a different interest rate, loan term, and repayment periods
than their current product(s). Depending on the software, accommodating the new product could
significantly increase time.
One partner MFI was in the midst of installing a new MIS, and was thus able to ensure that the new
product was incorporated immediately.
Others may not be so lucky, and may have to operate “off-line” in order to get the level of detail needed
to monitor the Pilot Test.
Also, the particulars of each product, market, and MFI make it difficult to project the time it will take to
properly prepare a product for the market.
It must be emphasised that even though conducting a Pilot Test is an occasional activity for management
and staff who are Pilot Test Team members, they will nevertheless need to be released from regular
activities to perform Pilot Test related tasks. The Terms of Reference should give the Team leader
authority to call for release time of the team members.
In fact, a significant level of commitment of resources – people, money, management – is required. Keep
in mind that the lack of investment in product testing often results in failed product introductions, large
costs and additional risk. Yes, it is expensive, and this is therefore a key reason why many MFIs simply
allow others to lead the market with new products and then copy what is successful – this, too, can be
problematic since of the three critical factors (product, market, MFI), at least one, and often more, are
different from that of the copied product.
For example, this is often why you hear people debate about
“replication” of MFI programs. A program or product that
works very well in a crowded capital city may require
significant changes to work well (or at all) in the more rural
areas due to completely different infrastructure, economies,
populations, etc.
9 Norman Reiley, The Team Based Product Development Guidebook. (Milwaukee, WI: ASQ Press, 1999) p. 9.
• Well-defined processes: The goal of the Test and the work parameters must be clear if the Team
is to complete its job effectively.
• Individual and collective self-esteem: The Team and its members must have the confidence to
allow for free and open discussion. Individual members or others outside the Team can and will
“bully” a Team with little self-confidence. The response to bullying a weak Team often results in
decisions being made that are not in the best interests of the product test, and ultimately not in
the best interests of the MFI.
This approval may come from the Managing Director or Chief Executive in a large MFI, or the Board
Chair in a small MFI.
The General Background notes the history of the product concept and product design – product
development stages which should have been completed before venturing on to the pilot test. This
section should specify how the general need for the new product was discerned.
The Specific Background identifies the desired results for the new product in relation to both
market and institutional needs. For example, it states the need for a new savings product to provide
for diverse needs/desires of customers and lists those needs/desires in detail, or it might specify that
10 Preston G. Smith and Donald Reinertsen. Developing Products in Half the Time. (New York: Van Nostrand Reinhold, 1991) P.111.
customers requested a passbook-free savings account. Additionally, it should indicate the MFI’s
desire to makes its operations more efficient and reduce costs.
Section II: Description of Required Activities:
This section of the TOR describes the activities required of the Pilot Test Team. It lists specifically
the actual activity for which the Team is composed, the methodology for conducting the test, the
composition of the Team, and formally designates the Team Leader.
This section also lists specifically what the Team is to be doing – these activities might include but
are not limited to:
• Developing formal quantitative and qualitative objectives
• Finalising product design
• Preparing for the test
• Testing the product
• Identifying and developing the process to be followed in determining success or failure of the
product test
Section III: Duration and Timing:
This section stipulates the time frame for the Pilot Test. It indicates the guidelines for when the test
is to begin, and when it will be completed. This section also outlines the meeting commitment of the
Team members so that the Team members and the approving managers understand the general level
of time commitment that will be required.
Section IV: Monitoring/Progress Control:
This section assigns accountability for the test and its outputs. It also assigns the general supervisor
of the Pilot Test Team.
Section V: Definition of Expected Outputs/Results:
This section defines the products expected of the Pilot Test Team. It states when the final report of
the Pilot Test Team is due, stipulates what other reports are to be completed, and when and to whom
the Team must provide its recommendations about the potential for future implementation and
expansion of the product.
Finally, this section should reflect the consequences in the case of non-compliance with the
guidelines of the TOR.
Finally, the Managing Director (or equivalent) and the Team Leader should sign the TOR. Copies
should be distributed to all members of the Pilot Test Team, and posted in private staff areas of all
branches and departmental offices so all within the MFI are clear about what is happening. You do
not want to post this in public areas of the branches because that would only serve to incite questions
and agitation from non-pilot test branch customers.
In the Workbook (Handout 3.3) you will find a sample TOR. This is only a sample. Terms of Reference
must reflect the particular circumstances of the Pilot Test, the Pilot Test Team, the size of the MFI, the
details of the product to be tested, and the general individuality of the company. Draft the particular TOR
that clarifies the issues within your particular MFI. After you have examined this example carefully, and
drafted your MFI’s TOR, you are ready to proceed to the checklist below.
Exercise
The participants can use Handout of 4.1 and Handout 4.2 (both of which are in the Workbook) and get
into organisational groups and develop the following: (45 minutes)
• A pilot test team chart naming the appropriate personnel. (Handout 4.1 Workbook)
• The specific activities required from the members and an estimate of the amount of time they
may be required to spend on the activity. (Handout 4.2 Workbook)
⇒ Consider alternate members of the team in the event that certain people are not
available or may not be interested.
• Review the Sample Terms of Reference, and consider the changes that you will need to make.
(spend less time on this section ) (Handout 4.3)
DO NOT simply copy the charts and TOR that are given as examples! Every
MFI is UNIQUE!
Session Objectives:
• Understand what a Testing Protocol is
• The What, How, Why and Where of a Protocol
• Determining what to analyse and when
• How to decide whether to cancel a Pilot Test
Time: 75 minutes
Handouts:
• Handout 5.1 Testing Protocol (Workbook)
Overview: This session helps MFIs adequately plan for the pilot test, providing a guideline
for the Pilot Test.
The goal of the Pilot Test is: Satisfaction with the results of the new
product.
The testing protocol is the “road map” that will help your MFI get there. Your
Pilot Test Team should craft the testing protocol carefully. It serves as your guide,
and without it you will be unable to navigate the treacherous waters of the Pilot
Test adequately.
• It formalises the activities that lead to the results, and further defines the procedures and
parameters for the test itself
• It addresses each significant activity required for success,
schedules that activity, and
allocates resources and responsibility for getting it completed.
In general, the protocol defines what will be done, by whom, and when.
The Team needs to consider all points of the testing protocol carefully in terms of the product to be tested
and the specific market for the product.
The Protocol details every activity, its anticipated start and end dates the responsibility parties
and the resources needed and /or allocated to the activity.
In these cases, it is often best to select the market areas of certain customer service personnel, and
hold the Test in those areas only. This is so that the company has access to a large enough pool of
clients, but does not have to train all field staff in the Pilot Test product.
Once the Pilot Test is concluded and the product deemed successful, then others can be trained and
the product can move incrementally to the rest of the branches. This facilitates control over the Test
while limiting training and monitoring expenses.
• A very small MFI might, in fact, have to offer the Test product to all clients if there is an incumbent
problem with separating clients using the same facility into “haves” and “have-nots,” which can
create bad feelings among an MFI’s customers. Still, in some cases where an MFI has a single branch
and many customers, it may be advisable to offer the product on a restricted basis. Shortly we look at
how small MFIs can reduce their risks.
Part of this risk is linked to the specific terms of agreement made with customers, and the fact that your
MFI will have to honour these terms. For example:
Because you should always ensure that your initial price is high enough to earn an adequate level of
profits, there might be an occasion when you find it possible to reduce the price to the customer. This
could happen with greater-than-projected volumes, for example.
I magine that you are a customer paying 4% per month for the new “Build Your
Own Building” loan. BYOB loan will finish the roofing and in 6-months, you will get
advancement (disbursement on the BYOB loan to finish the windows and burglar
proofing.
\
This is going to be a rental unit, and you already have a customer who wants to rent
it. You are charging her enough to cover your loan payment and make a little profit.
Now your MFI realises that it priced the product wrong… if they increase the price
to you for the next advancement on the BYOB loan, you will not make a profit, and
may even lose money… or lose your tenant.
But, if the MFI tells you: “We have had such good response for the BYOB loan, we
are offering our experienced customers a rate of only 3.5% per month”, you will be
very happy indeed!
If your MFI changes its terms for new customers, you should also consider re-adjusting the terms for old
customers – even if their contracts are for higher (less beneficial) terms. This will help build good will
and loyalty among your customers.
This is an important reason why new products should be introduced in a testing process.
Test, and the risk of problems is thus much greater than with a multi-branch MFI that has the ability to
limit its risk to a relatively small pool of customers.
Limiting the number of customers will also limit the problems and risk, and allow the MFI to better
assess customer behaviour. You must have enough data sufficient to make the decision whether to roll-
out the product to the whole institution, or not.
Your institution could offer the product in many ways to limit the number:
• First-come, first-served basis, (make a maximum of 5% to 10% of the total clientele)
Or, you could set a strict limit to the actual number of participating customers.
• Available only to the first 500 clients (in an institution of, say, 5,000 clients)
Once the limit is reached, the product is not offered to anyone else during the Test.
Many Post Office Savings Banks rent space in a post office and pay a commission to the post office for
each transaction that is conducted for the POSB. A branch like this where the MFI does not have direct
authority over the branch would be a very poor choice as a test site.
Space Needs: There should be enough space within the site to accommodate the specific needs of the
product
• a new cashier window may be needed if the product is to be delivered separately from other
products.
A “nicer” space may be needed if, the product is Prestige Banking for “upper end” clients
• or space may be needed for computer installation if the product uses a computerized system,
and may require further improvements like air-conditioning.
Infrastructure: For ease of adaptation and test management the potential site should satisfy at
least the basic needs of the product and its implementation: Electricity if the system is computer
based, and telephones for communication between the Team and the branch staff.
Market access: The site should have a sufficient number of potential customers for the specific
product being tested. It must act as a reasonably representative sample of the total customer market.
• This does not exclude rural or sparely populated markets! Don’t forget that the delivery method
or “process” (in the 8 Ps) can assist in increasing market access.
Staff: For effective implementation of the Test, staff the site with people who are enthusiastic about
implementing the Test for the specific product. This may require a careful look at incentives for the
site manager and staff.
An MFI wanted to reach farmers. However, they are widely spaced and roads are difficult. The farmers,
however, already participated in an association that met periodically with a farm-NGO to discuss
improved farming techniques, maize marketing issues, etc. The MFI scheduled their meetings around the
NGO meetings and was able to serve the farmers market – and increase their outreach, profitability and
meet their objectives “double bottom line”. The NGO was also able to alert them to other well-organised
and profitable farmer groups.
After research, MFI Y developed an individual loan product. They costed and priced the product,
developed policies and procedures, changed their MIS to accommodate the individual loans, advertised it
in the pilot test branches… and still saw only 20 customers take up the new loan product in 4 months
(projections were about 20 per week).
Was the research wrong? Not really, but they hadn’t “researched” loan staff’s attitudes.
Staff were worried that individual loans would weaken existing groups and create more work for them –
collecting bad loans was a group responsibility in the regular loan product, but would be a loan officer
role for the individual product.
In the first case, the whole point of the product test is to ensure a quality,
profitable product.
If the product cycle is short, say six months or less (as in a school fees savings – or loan - product that
would be liquidated every three to four months), then it is preferable to implement the Test through at
least one full cycle.
Such a strategy provides an opportunity to assess continued use of the product by the customer. This
information is invaluable in determining the value the customer places on the product, and will provide
the institution with actual information on the likelihood of continued participation, or rollover.
Conducting the Test through one full product cycle requires a total testing time that is longer than the
cycle itself. This is because it takes time to get to a testable level of customers, and then the customers
must go through the whole product cycle.
This allows for a build-up of a critical mass of customers, allows them to complete the cycle, and allows
the Pilot Test Team to evaluate the results.
If the product cycle is long, say longer than six months, (like a one-year fixed deposit or a home-
building/mortgage loan), or undefined (like a regular savings account), the testing cycle should allow
enough time for a critical mass of customers to be acquired.
This process will most commonly take about twelve months to get good results. In a market area where
seasonality issues are limited in significance, and you get rapid interest in your product, you may be able
to conduct a test in as little as six months, but certainly no less than that. The common range for such a
test would be between nine and fifteen months.
In East Africa, for example, customers report (through PRA) that there is a massive outflow of household
funds in November and December related to the Christmas buying season. In January, there is a great
need of borrowing and no availability of funds for savings, because of common overspending during
Christmas (often resulting in short-term debt), school fees coming due, and slow business due to a
general lack of funds in the communities. It would therefore be unwise to begin the testing of a new fixed
deposit account in November, December or January, and expect similar customer responses during the
balance of the year.
After that, assuming the Test has settled into a routine, monthly
review and meetings are adequate. Monthly reports allow enough
data to be generated to warrant reporting and review. Reports,
based on the product objectives and issues that arise during the Test, should be provided to the Team
within five business days of the end of each month, and the Team should meet within two days of receipt
of the reports to discuss them and to make decisions based on the information gathered. It is important
for the Team to receive timely information so that their review and decisions are relevant.
The Team should watch for any significant deviations from the planned utilization. Shortfalls, as well as
overages, could impose a significant risk to the organisation. These deviations need to be reviewed and
reconciled against the plan. The Team should discuss any issue that appears as though it might pose an
unnecessary risk to the institution. The Team then must either agree on a solution or decide that the risk
is acceptable.
Ask yourselves: Is the Test progressing as planned in the protocol – are you on target in terms of
number of customers, profits, expenses?
From this review the Team should evaluate the Test in terms of the revised projections and make
decisions about continuation, alteration or discontinuation of the test.
Q: What are the options available to the Pilot Test Team as data
are evaluated?
There are four options:
Exercise
Time: 30 minutes
Using Handout 5.1 Testing Protocol (in the Workbook), the group(s) should:
1) Compete all that can be done now
2) List the pieces that can’t be completed now and what information will be needed to
complete the protocol.
3) Keep in mind that we will be coming back to the Protocol again and again
4) Examine whether to add people with other skills, or whether enough time has been
allocated for the tasks listed in the testing protocol.
Feedback: There are 30 minutes allocated at the end of the day for review. You can utilise this time
instead to answer questions. As always, the Testing Protocol in the workbook is merely
an example and is not to be copied verbatim.
Day Two
Session Six - Step 3: Defining the Objectives
Session Objectives:
• To understand why we need formal objectives?
• To learn how why to quantify objectives –before and after doing the financial projections
Handouts:
• Handout 6.1 General Objectives (Workbook)
• Handout 6.2 Specific Objectives (Workbook)
• Handout 6.2 Reality Check on General Objectives
• Handout 6.3 Quick Loan Analysis Survey Example
Overview: This session helps MFIs define and establish clear objectives and understand
how the objectives will influence their projections. The session stresses realism
in setting and adjusting projections and objectives.
In order to determine the success or failure of the Pilot Test, it is essential that the objectives for the new
product be clearly defined. This step is a two-stage process involving General Objectives and Specific
Objectives, based on the financial projections.
With this level of specificity you will know where you need to aim and from there you can determine
what you will need to do to service this volume of customers.
Each MFI will have a very distinct set of objectives with regard to the specific values, or targets, assigned
to the different objectives.
Exercises
The groups will breakout for only 15 minutes to begin define their General Objectives (for their own
MFIs). They do not need to do the specific targets yet, as we need to take a closer look at the financials
before getting too specific. They should come up with general figures – like the number of new accounts
at the end-of-test period.
Point out that this is beginning to demonstrate the fact that the “Steps” are
not necessarily sequential, and that sometimes you need to go ahead, and
Idea: back to earlier steps, to ensure that all the steps are in agreement and tell a
full picture.
If you are working with groups that do not have a common MFI, use the PowerPoint slide and elicit
group answers. However, it may be a good idea to get the group moving out of their chairs this early in
the morning, to ensure that they are fully engaged!
For example, although the MFI’s policy may be for break-even in less than 24 months, this is only outer
parameter for the product. It is impossible at this point to determine the break-even point of this product
until it has been fully modelled.
When your Team does the financial projections properly, you will:
• Have monthly targets.
• Know if the variables are realistic.
• Know if the cost/price mix is adequate.
At this point, what you want are general objectives, (profitability, efficiency, growth) with their general
targets (profitable in less than 24 months, customers in bank for less than 10 minutes, 10% growth).
Exercise: Multiplier
__________________________________________________________
Exercise 6.2 Multiplier
Time 15 minutes
Low Growth: Projections consider the impact of growth being significantly lower than expectations.
High Growth: Projections consider the impact of growth being significantly greater than expectations.
Factors that could influence whether high or low growth scenarios are achieved are many. They include:
A Reality Check is in order. Optimism is a good thing, but with a new product, you need to be very
realistic!
Reality Test
Your team must get together and do a Reality Test.
“We now have 1,000 customers and get 10 new clients per month on a similar product. (120 accounts per
year)”.
“Can we really gain 2,400 customers for a new product in twelve months?”
Is our “2,400 end-of-test target” realistic?
“Let’s review our rationale… we thought 10% of our clients would also borrower from the new account
(100). Well, they won’t do it every month… Hmmmm. That’s only 8 accounts per month. But, we do think
this will be more popular, and in the product concept testing, we found that 58% of non-clients said that they
would be interested. But, they will take some time to actually start coming in… OK, let’s say we get 5 new
accounts the first three months from non-clients, and then grow to 10 new accounts after that…After six
months, we may publicise it more, and say get 20 more accounts per month from new clients….”
“And you know, we wouldn’t be able to handle 200 accounts per month as we had planned! We don’t have
the capacity, yet. It sounds more realistic using this rationale.”
The following looks at the rationale of one MFI in selecting their quantifiable, end-of-test targets.
An example – Savings
The Pilot Test Team had to calculate an end-of-test target for the product based on the general objective:
Enlarge overall customer base by 10% over two years.
1. First, the AMC Team looked at the current activity in a similar account, and added their knowledge
of the market and expressed interest derived from PRA. They have a Regular Savings Account, and
the number of new accounts opened in an average month is 200. Using this information, they arrived
at a best guess for a target figure.
AMC had 200 customers coming into the institution each month to open new accounts. They
estimated that in an average month, 50% of that number would open a FASA, and 50% would still
open a Regular Savings Account. That meant that they anticipated 100 new FASAs would be
opened, on average, each month.
2. Next, they anticipated that one-quarter percent of the 10,000 customers who already had Regular
Savings Accounts would close their Regular Savings Accounts each month and open FASAs,
because the new account served their needs more adequately. In the industry, this is called
“cannibalization.”
3. Finally, since AMC had a normally aggressive outside marketing campaign, they estimated that
another 75 customers per average month would come into the institution intentionally to open a
FASA. This would result in a total of 200 FASAs for an average month. Since their data showed that
in an average month 200 customers come into AMC to open Regular Savings Accounts, their end-
of-period target factor is a factor of 1.0.
4. Since the test period is twelve months, and their calculations showed a target factor of 1.0 times the
average number of Regular Savings Accounts opened, it was reasonable to anticipate 2,400 FASAs
in the first twelve months. After applying the “reality test” to these numbers, they set 2,400 FASA
accounts as their end-of-period target.
Again, setting end-of-period targets is highly specific to an MFI, its market, and the product. It is also
important to recognise that these are projections only. In reality (and in your financial projections,
covered in Step 5), you will not likely have the same number of new accounts every month – for
seasonality reasons, product build-up reasons, and others. Therefore, these endpoint targets might be
adjusted based on the realities of the financial projections.
Financial projections may show that the customer base can be enlarged by as much as 15%, which might
then become the endpoint target for the product in test.
If you need to assess the qualified available market, you will probably need to look at conducting a
quantitative survey. This is known as a “prototype test”. Prototype tests are not cheap to conduct … and
require careful planning/execution if they are to yield useful results
A prototype can be tested among a fairly small group of customers or potential customers, as long as
there is an adequate sample in each sub-group of interest/market segment.
It does not give an actual prediction of the likely up-take of the idea since respondents may over claim
interest or not take in to account other factors, which eventually limit use.
A well-conducted prototype test will allow the market researcher to find out the level of appeal of the
prototype. This information will allow him/her to refine the idea if necessary or to refine the marketing
of the product so that it is targeted more specifically to the most appropriate population.
• To Prototype Test?
The decision to or not to prototype test must be based on cost and risk. If the proposed product would
cost a great deal to deliver (necessitating changing systems or large-scale investment) and/or is
considered high risk for the MFI (it might cause client or revenue loss if misunderstood) a prototype test
is necessary.
Larger organisations are more likely to need to prototype test products before pilot-testing. All research is
designed to reduce the risk of introducing products that do not meet the needs of customers, and so fail.
The prototype test acts as a check on product ideas developed from qualitative research that cannot be
truly and statistically representative of our target group.
The prototype test closes the gap by bringing the idea back to consumers before it is launched. Many
private sector companies will not carry through a product idea unless it reaches a set level of appeal
among customers at the prototype test stage. Typically, the prototype must meet no less than 70% of
customer approval.
However, Prototype Tests provide only an indication of theoretical demand – and this is often very
different from actual (realisable) demand for the product.
Moving directly to pilot-testing is more likely to be appropriate for small/medium MFIs able to
react/adjust quickly to the results of the pilot test.
If on the other hand you decide not to prototype test be sure that you can take the risk of the work
involved in piloting and then amending the prototype if necessary.
In order to be competitive, your product should have improved features over theirs. This would increase
the demand, BUT recognise that consumers who wanted the product could still get it from your
competitor (instead of you), and those already with the competitor may be hard to acquire.
Thus, it is important to recognise that if you introduce a product that is very similar to a competitor’s,
product, and your new clients will most likely come from your own current clients.
This has costing implications that you will address while calculating the financial projections (Step 5).
You will expect slower external growth (new clients from outside), and expect a larger percentage of
your own customers (existing clients) transferring to the new account.
But don’t worry: while the competition can copy the visible “externalities” of your product, they cannot
copy your systems for delivering it – it is better to take the time to get the systems right and deliver the
product in an efficient manner than to be rushed into delivering it before you are ready to manage it
effectively.
3. Finalising Objectives
Time: 60 minutes (30-45minutes exercise)
Slides: 5
In the Pilot Testing process, objectives should include some target for at least the following areas:
• Growth
• Financial results
• Efficiency
• Marketing effectiveness
• Customer satisfaction and (if a loan product is to be tested)
• Portfolio quality
Well-designed staff incentive schemes can have positive and powerful effects on the productivity,
efficiency and quality of MFI operations. Conversely poorly developed schemes can have serious
detrimental effects. Incentive schemes must be transparent so that staff members affected can easily
understand the mechanics of the calculation. Thus the system should not be overly complex and should
contain as many objective factors and as few subjective variables as possible. Furthermore, the “rules of
the game” should be made known to everyone and should not be changed arbitrarily. In addition, it is
essential that the incentive scheme be perceived as being fair, and thus the goals set out by the scheme
must be attainable, and better performing staff members must indeed be rewarded with higher salaries.
Finally, everyone must be able to achieve a higher compensation by working better and harder.
Q: Once we set the product objectives, are we done with this step?
No – you still need to define your specific objectives.
Remember what we said at the beginning of this step. Although you will set specific targets as part of
your product objectives, these targets may change based on your financial projections and the need for
the product to be profitable. Profitability and sustainability for the institution should ultimately guide
decisions regarding product targets.
After Market Research the Pilot Test Team designed an account that would allow customers to make
unlimited withdrawals, it would be computer-based and therefore passbook-free, and would have a tiered
fee structure that rendered the account ultimately profitable. The computer systems needed to make the
account passbook-free would render the account more efficient.
From those guidelines, the AMC team compiled the Objectives Table 5.4a below. This example shows
ten objectives with end-of-test targets. Because of the nature of the product and the objectives, the
Handout
baseline for5.4
all aobjectives
AMC FastisAccess Savings
zero and Account
is therefore notObjectives
included in the table. This example clearly shows
the objectives, the endpoint targets, as well as an explanation for the targets. A column also links the
objectives to the five critical objective areas noted above.
(Target Area)
Item Objective End of Test (M12) Explanation
Net Number
1 of FASA 2,400 Growth Explained in example above.
Accounts
New FASA
The institution already has a restrictive basic savings account and a term deposit
accounts as a
account. It is anticipated that some customers will still want these accounts.
percentage of
However, the Team believes that the flexibility and transaction speed of the
all new
2 ≥ 75% Growth FASA account will be very attractive to new customers, and AFRI-CO wants to
accounts
promote the new account among new depositors because it is much more efficient
opened at the
for AFRI-CO. Thus, heavy utilization of this account will make the institution
AFRI-CO
more efficient overall.
test-branch
This is the total amount of deposits AFRI-CO expects from the 2,400 new
accounts. The regular savings account has an average balance of AFshs1,900.
Management
Total FASA
believes this product will attract a slightly more affluent customer who, because
3 Account AFshs 6.6 million Growth
they know that they have access to their account, will maintain less liquidity and
Liabilities
increase their savings balances. Management desires a somewhat higher average
balance (without moving away from their market niche) to improve their
efficiency.
% Increase in
net branch
deposits Because of the term deposit account with much higher average balances this
4 value ≥60% Growth projection is lower than the 75% of new accounts. Again the Team wants to
attributable to promote this account to improve their efficiency.
FASA
account
Cumulative
NPV
loss/profit
Loss is ≤ AFshs Financial This is the limit of loss during this period that the Team and management are
5 (net of
600,000 Results willing to accept for this product.
Regular
Savings
transfers)
Average transaction
Based on the general objective to make the transactions more efficient for both
Bank time Deposits =
6 Efficiency the client and AFRI-CO, the product is to be implemented to meet this specific
efficiency 2.0 minutes
objective.
Based on the general objective to make the transactions more efficient for both
Bank Average transaction the client and AFRI-CO, the product is to be implemented to meet this specific
7 Efficiency
efficiency time W/D = 2.5 objective. Because of verification procedures the Team expects withdrawals to
take longer than deposits.
Customer in lobby ≤
Efficiency for 6 (six) minutes
8 Efficiency Based on the general objective to make the product more efficient for the client.
customers on average
Marketing staff
activities result in
Market target Marketing The Team wants quantitative measures to track the results of the marketing
9 average 50% of
Objective Effectiveness department.
new accounts
The AMC is a medium-sized MFI that already offers a basic loan product, the Our-Way Loan. This
is a loan that many customers used because it was the only source of borrowing available. Their
customers had indicated in PRA research, including Product Attribute ratings, that they wished for
faster service, more flexibility in loan terms (loan duration and repayment periods, for example), and
they wished to be able to acquire loans when they needed them and not necessarily within AMCs
rigid disbursement schedule. The AMC Pilot Test Team recognised that in addition to satisfying
customer demands, any new product they offered would have to satisfy the institutional demand for
a product that is both efficient and profitable.
After Market Research the Pilot Test Team designed an account that would allow customers to
borrow when they needed. These loans would also come with flexible terms corresponding, within
parameters of business prudence, to the needs of the customers. The loan would carry a fee and
interest rate structure that rendered the account ultimately profitable. A new computerized
processing and tracking system should make the process more efficient, as well as provide more
timely information .on delinquencies and loan problems.
From those guidelines, the AMC team compiled the Objectives Table 3.1 below. This example
shows ten objectives with end-of-test targets. Because of the nature of the product and the
objectives, the baseline for all objectives is zero and is therefore not included in the table. This
example clearly shows the objectives, the endpoint targets, as well as an explanation for the targets.
A column also links the objectives to the five critical objective areas noted above.
This is the total portfolio value AMC expects from the 240 loans outstanding
at the end of the test. The Flexi-Loans are anticipated to have an average
Total Flexi- outstanding balance of about Afshs200,000. The Our-Way loans have an
Loan average balance of about Afshs150,000. Management believes the Flexi-
3 outstanding, AFshs 48 million Growth Loan product will attract a slightly more affluent customer who, because
performing, they able to acquire loans that respond better to their specific needs, will
assets balance borrow more. Management desires a somewhat higher average balance
(without moving away from their market niche) to improve their efficiency.
% Increase in
net branch
loan assets Total loan assets are anticipated to increase by 70% which is more than
4 attributable to ≥70% Growth growth in customer numbers due to the higher average balance anticipated
the Flexi-Loan by the Flexi-Loan account.
account
Cumulative
Cum. Loss is ≤
NPV
Afshs 8 million
loss/profit (net This is the limit of loss during this period that the Team and management are
5 by end of test, Financial Results
of Our-Way willing to accept for this product.
and cum. Profit
loan transfers)
by month 30
Average total Based on an understanding that the computer systems will improve
time processing efficiency by reducing manual effort. Additionally, AMC has sampled the
Bank
6 Flexi-Loans by Efficiency Our-Way Loan and identified an average processing time of about 2.2 hours
efficiency
all staff = 30 per loan. This is deemed unacceptable by management.
minutes
Portfolio at
With any efforts to grow a loan portfolio there must be quality related
7 Risk (>30 <2% Quality
indicators to control staff and new customers.
days)
80% of Loans
disbursed within
Efficiency for 24 hours of Based on product attribute studies and other PRA work and the general
8 Efficiency
customers application fro objective to make the product more efficient for the customer.
approved loans
Marketing staff
Marketing activities result in
Marketing The Team wants quantitative measures to track the results of the marketing
9 target average >50% of
Effectiveness department.
Objectives new loans
How to monitor the Test against objectives is covered in detail in Step 10.
Exercise
Review the Specific Objectives completed for Afri-Co Microfinance Company. Using the blank form in
the workbook, ask the groups to consider and write down their own objectives using Handout 6.4:
Defining Specific Objectives.
Again, this will depend upon the number of MFIs and/or participants that you have.
Remember:
Growth
Financial Results
Efficiency
Marketing Effectiveness, and
Customer Satisfaction
will guide your objectives.
Then, you can set up the 5 “Titles” on the wall or on flipchart stands:
Growth, Financial Results, Efficiency, Marketing effectiveness,
Customer satisfaction and ask them to put their objectives under each.
As a group, examine the similarities and differences of the objectives provided. Are they quantifiable?
Specific? Is there baseline data provided? Does it cover the full period of the pilot test?
Alternatively if your participants do not have a product ready to test you can use the hidden slide
Exercise 6.4 “LeaseLoan Pilot Test Objectives” and ask them to review and comment on the
objectives that MyMFI has used.
Session Objectives:
• To allow MFIs to determine their computerisation needs
• To ensure that new products are incorporated in all systems – loan tracking, accounting,
financial reporting, etc.
Others: Flipchart
Overview: This session helps MFIs examine the issues around computerising their financial,
accounting, reporting MIS systems in order to incorporate new products. This
session also looks at the practicality of computerising… or remaining manual
This session may be a little “drier” than the others. There are several
links to internet sites and other computer documents. There are less
hands-on things to do in this session than in others – as their systems are
back at their MFI offices. You should ask for experiences in several of
these areas, as you go along. Almost everyone has at least one “bad
computer” story.
Get your IT department to set up a dummy version of the product then run comprehensive tests to ensure
interest and charges operate as expected. Trust but verify! Don’t rely on assurances from IT unless they
can show they have tested the product. Ensure that the system can accommodate changes in the way the
product is priced if this is necessary.
And finally … check the system produces the reports you need, in the format you need, when you need
them.
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This offers several benefits, including those of marketing (customers see the new activity and, especially in an institution that will begin
branch computerization with this product, they see advancement) and testing (by having the computers in the actual work site staff can practice
in real office conditions). Also, supervisors, managers and other staff can get used to the issues of having computers in the office.
12
Note that these comments relate to the pilot test branch. The software and hardware to be used with the product test need to be need to be well
tested, have procedures manuals and have relevant staff trained on their use more than one month before projected test commencement.
2. Follow a systematic process for developing and implementing a management information system.
On such approach is the process outlined in the CGAP Management Information Systems Handbook
and reproduced below. The handbook can be downloaded from CGAP’s website www.cgap.org
Phase 1: Conceptualisation
Step 1: Forming the task force
Step 2: Defining needs
Step 3: Determining what is feasible
Step 4: Assessing the alternatives
Step 5: Preparing the MIS needs assessment report
Exercise
Allow 45 minutes for this exercise, depending on your group and the timing.
Either in small groups, buzz-groups and/or as class-wide exercise - go through Handout 7.1 and
determine what key areas your clients’ organisation will need to focus on.
In addition to the needs raised by this exercise, participants should also note areas in which you will need
to seek answers and the impact on your Team (do you need another member? Will this require more
time? Is this going to impact the financial projections? Etc.)
Read Handout 7.1 “Key Questions That A Bank Should Consider When Introducing A New Computer
System” extracted from the CGAP Handbook.
Feedback to allow participants to share their views – on both the computer systems and the impact of
same on training, financial, etc. - and stimulate other teams to realise what further work they may not
have noted.
Q: How can we reduce the risk that the system fails to perform to
our expectations?
• Design your product with care: The more changes you make to the design of your product,
the more changes you are likely to have to make to the set up of your computer software. Use
market research to ensure your product meets the needs of your customers
• Specify your user requirements carefully: Any IT system designed around erroneous
specifications is unlikely to meet needs, this is one of the most crucial steps in developing an
IT system
• Follow a structured IT development process: Such as the one mentioned above
• Use risk management procedures: See MicroSave’s Risk Management Toolkit for ideas on
proactive risk management
• Specifically consider communications risk: Many computer systems, which are feasible as
standalone solutions, fail in a networked environment in developing countries as
communication options were not properly considered and tested during the establishment of
the pilot test.
• Project management process: Consider employing a professional project manager with
experience in IT projects to manage the process on a part time basis.
• Extensive user acceptance testing: Extensively test the system with users, using extreme
conditions. A user acceptance testing protocol is annexed
• Audit your system: Internal audit must test and approve the system before it is used
• Pilot Test site: Consider testing your system in a single test site
• Recognise system limitations: It is extremely unlikely that any computer system is going to
meet every expectation demanded of it, especially given changing needs and expectations
• Ensure local support: Ensuring adequate systems and software support is available locally
allows the system to be responsive to changing needs.
While the idea that getting it all done at once (a whole new system for the MFI at the same time that new
products were being developed) seemed to be a good one… there were time over-runs by the installation
people. The electricians were delayed with their work, also. The system for the Head Office needed to be
adjusted before the Branch could be installed, etc.
Needless to say, the Pilot Test had to be delayed in order to allow for the systems to be installed at Head
Office and Branch, for all staff to be trained and then for more specific training to staff at the Branch.
There are many systems in the market, and at most price levels. None of them are perfect, but it is likely
that there is at least one available that is sufficient for your MFI’s needs. Look at those first, and
recognise the basic needs that they satisfy.
Using pre-existing software packages saves a great deal of time and money. When you are working to
introduce new products, the longer you wait to launch your product while you search for the perfect
software, the more time your competition has to develop their own new product.
However, for the benefit of cash flow, delay these purchases as long as
practical, recognizing that all equipment must be completely in place, fully-
tested and operational, in the test branch at least two weeks before the
anticipated Pilot Test commencement.
Additionally, at least one week of credit officer and credit supervisor time should be spent practicing
all transactions and all operations (including month- and year-end processing) several times. This should
be more than a week if your staff is un-used to computers. It may take them time to simply feel familiar
with a computer!
If you have clients coming into the MFI to make payments and receive disbursement, install the
computers so that access is convenient for relevant credit officers and clients, most preferably in a station
or desk. This means that there must be an adequate power supply to the stations, and that all relevant
computers are connected to a nearby printer and other needed peripherals.
• Who wants to wait for the cashier to walk upstairs, fix a paper-jam, chat with
her co-workers and return with your papers 10 minutes late?
• Why should the printer be in the Manager’s office if he habitually closes the
door when he has meetings, allowing no one to enter?
At the same time that computers need to be in a convenient place, access to entering
or changing data on them must be entirely secure.
In all cases make certain that your computer systems are connected to an
electricity protection system the moment they are installed. In areas with
constant reliable electricity this will mean a good surge protector. In areas
where power is available reasonably consistently, a surge protecting
uninterruptible power supply (often called a “back” UPS) is essential to
minimize “down time” and to reduce the chances of damage to your computer
hardware and software when the power fails. If electricity is often down for more then thirty minutes, an
institution will require a generator or inverter and a back UPS. In general, the less reliable the electricity
in an area, the more expensive it becomes to maintain computer systems.
Computer systems can be frustrating and difficult to maintain. In your area, they
may also be items that are frequently stolen. Therefore, it is also important to
purchase good quality insurance coverage (against theft and damage) and a
quality maintenance agreement from a reputable local firm. If maintenance is not
available, you need to re-think the manual systems verses computer system
decision.
Given the expectations of relatively low volume (approximately 20 loan approvals per month) it may
make most sense to install the computer system with a regular cashier who can work with both deposit
and credit customers. This approach is likely to be much more cost effective.
If your MFI has loan disbursements in another location and payments directly to a bank account like
many MFIs do, your computer(s) will be located in the back office, likely with the MIS department.
Q: What happens if the power goes out, and we must shut our
computers down for a day or two?
Computer down time can be a great inconvenience to your customers and a source of
much cost and frustration to your MFI, so you will need to minimize this as much as
possible.
You must be certain that you have a tested and effective manual back-up system and
any other related guidelines drafted and well-documented as part of the new product
operations and procedures manual. At a minimum, you will need to ensure the daily back-
up of your computerized systems, and a daily hard-copy printout of customer balances 13.
13
Do this in very small but legible fonts with multiple columns per page to minimize the amount of paper involved in this process.
Once you have the system installed and tested, it is appropriate to have it reviewed by both your
internal and external auditors.
Supervisors must be able to manage the computer security controls system and back-up and restore data.
This information can be conveyed through quality staff training (see Step 7: Training the Relevant Staff).
In many cases, a computerized system can be adapted to accommodate a new product. Either a new
module needs to be designed into the system, or the new product needs to be set up on the computer
system.
Where a new module needs to be designed into the system, the MFI should go through the steps outlined
earlier, and in the appendix. It is important to take the time to consider alternatives: if the existing system
is towards the end of its lifecycle, it may be more appropriate to opt for a new computer system than
design a new module.
If a product needs to be set up on an existing system – it is important to establish as early as possible after
the design phase that the system can accommodate the features of the product prototype. Normally each
product has a master record where the parameters of the product are defined. For most products with
simple charging structures, it will simply be a matter of setting up appropriate parameters. However,
there can be difficulties, particularly with conditional pricing structures (for example, a savings product
which allowed 2 free withdrawals per month after which a charge is levied on each withdrawal).
The second area to examine on your existing system is reporting. A new product may have different
reporting requirements than existing products in this case, either
It is a common belief that all MFIs need computerized systems. This is clearly untrue and many large
MFIs (for example ASA in Bangladesh) operate well without such systems. If you do not have the
infrastructure or the computerized systems, and you can appropriately manage your accounts, then a
manual system is a reasonable solution.
Be certain that all appropriate account numbers and transaction codes have been assigned for each related
type of transaction 14. Make sure that all relevant staff are well trained in your new product system, and
that they know all the relevant codes and account numbers. You will also need special files available to
the credit officers in which to maintain customer records, and these records should be protected from fire
and theft.
CGAP Technical Tool #1: “Management Information Systems for Microfinance Institutions”, Charles
Waterfield and Nick Ramsing (www.cgap.org),
“Banking Institutions in Developing Markets: Volume 1: Building Strong Management and Responding
to Change”, Ikkramullah Khalifa in McNaughton Diana ed.
(www.worldbank.org/finance/CDRom/library/docs/mcna1/mcna107e.htm)
14
These include at least: Account numbers for the loan asset, fee and interest income accounts, accrual accounts if your MFI accrues earnings, as
well as codes for disbursements, payments, the different fees, interest, fee reversals, interest reversals.
Session Objectives:
• To understand how to prepare financial projections for an MFI.
• To ensure pricing for profitability
• To determine and incorporate key issues in costing products
Handouts:
• Exercise 8.1a Description of the Loans Projection
Spreadsheet.Exercise 8.1b Spreadsheet – AMC Flexi Loan Projection
Overview:
• This step will help your Team to analyse the potential impact your new product
will have on the financial position of your institution.
• This session helps MFIs think about the costing and pricing of their product, and
how to prepare financial projections for the new product. We discussed this a
little bit earlier, but now we will be going into new details. We will be thinking
about the cost implications of all the topics already talked about, and more.
Process
1. Preparing Financial Projections
Time: 30 minutes
Slides: 10 (including 3 introduction)
Your MFI wants all new products to be profitable, and profitability is one of the most important
objectives for your new loan product.
Given this objective, keep in mind that it is never appropriate to make a decision that will
significantly impact the financial stability of the institution – like launching a new product –
without first assessing its likely financial impact on the institution.
This step will help your Team to analyse the potential impact your new product will have on the financial
position of your institution.
Many of the costing factors are easily determined, such as the direct costs of staff, training, fixed assets,
and others. Indirect costs and overheads can be very complicated to assess and require expertise in
costing methodologies. To do this properly, institutions will need to have an accommodating chart of
accounts and applied allocation tables. Though this is a difficult process, it is critical for understanding
the full costs of your product. There are several projections that can and should be made.
Transaction time projections: This is part of defining specific objectives for the new account
(see Step 3 – transaction time for clients is to be 10 minutes). Once there is a basic
understanding of how the transaction will work, it is a relatively easy matter to project the
average transaction time and to project the paperwork cost per transaction. This could be done
as a paper “walkthrough” projecting the time required for each step of the transaction (which
will be detailed in your Policies and Procedures manual (Step 6).
The projection will be adjusted once the full procedures are written, and adjusted yet
again once there is actual history of client transactions.
Cost of funds: Based on the interest rate policy for deposit liabilities of the institution, and its
source of lending capital (deposits, borrowing, other capitalization, donors), a cost of funds can
be determined.
Loan volume and value growth assumptions: Ask yourselves: At what pace will this loan
account progress to higher balances, and how much will people actually borrow? No one knows
for sure, but educated assumptions can be made. We talked about some of these issues earlier.
To make these assumptions, your Team can examine several factors, which may include the
following:
• Growth rates from similar products introduced previously.
• Growth rates for similar products in a similar market that might be available from different
institutions (companies with an international network could potentially utilize this option).
• Market intuition of operational and marketing staff.
• Results of market research done with respect to the product.
If your MFI has been operating for five years and has one thousand customers with an average
outstanding balance of $100, it is unlikely that in six months there will be a gain of one thousand more
customers with an average outstanding balance of $1,000, unless such an increase can be realistically
justified.
Once the Test has commenced, the Team will be able to obtain actual data rather quickly through close
monitoring. But be careful!
The “curiosity effect” – customers borrowing from your new product simply because they are
curious about it, but return to their prior borrowing source after one loan cycle – may skew early data.
Keep a careful eye on renewing customers and drop out data.
Many people may also use a savings account differently in the beginning. They may want to see if
you really mean “you can deposit any amount you want; Withdraw any time you want.” After they
find out you really mean it, they may be less inclined to come to the bank with tiny (“small-small”)
sums, which may change your staffing requirements.
Over time, actual data will supplant the historical estimated values. When that happens, and your Team
re-projects the results, then the evaluation criteria from the Testing Protocol can be applied to the new
numbers.
The trainer should read through MicroSave’s Toolkit for Costing and
Idea: Pricing Financial Services in order to provide participants with an
overview of costing and pricing. However, as you can see, it is a topic
that in itself is worth a complete training course. The main thing that the
participants must realise is that all of the direct and indirect costs of operating the new product must be
considered. In many, many cases institutions have failed to consider “small” things, like the additional
transportation costs a new product might bring… which in turn means that loan officers can handle fewer
clients… which in turn means that staff salaries haven’t been adequately priced, etc. Thinking about the
entire process of the product will assist the institution in developing a full understanding of the cost of
offering this product.
Remember that losses are likely early in the product life-cyle as the product takes time to
develop profitable volumes of business. At this stage it is the trend towards profitability, which
is more important.
Actual Experience
Cost: Firstly, a product needs to cover its cost of provision, ensuring adequate returns to
shareholders and to cover risk
Competition: Secondly, the prices for similar products and services offered by competing institutions
needs to be considered. To do this competition matrices should be drawn up that examine
competing product features and prices.
Value: Thirdly, the institution needs to determine whether clients value the product or associated
services so highly that a premium price can be charged. Qualitative research is required
to determine this. For more information on qualitative research see MicroSave’s
“Market Research for Microfinance Toolkit”
Why bother to cost products? In the right environment, the benefits of product costing are
considerable. Identifying sources of profitability (and losses) allows a financial institution to focus on
promoting their winning products, and redesigning those less profitable. Understanding of processes
facilitates improvements in efficiency and a detailed understanding of cost structures allows more
informed pricing decisions to be made.
MicroSave’s work with its Action Research Partners (ARPs) has clearly demonstrated that product
costing interacts strategically with a huge and diverse range of business areas including pricing,
efficiency, outreach, the design of incentive schemes, the identification of the most suitable product
mix, marketing, customer service, staffing patterns, profit centre accounting and budgeting.
The MicroSave Toolkit for Costing and Pricing Financial Services, demonstrates allocation based
product costing, and provides key insights into the three principle methodologies for pricing products,
competitive pricing, cost based pricing and demand based pricing.
In modelling, the Team can determine an appropriate, profit-producing cost/price mix (operations,
investments, interest, fees, and restrictions).
The cost/price mix, when combined with realistic growth projections, will show whether or not the
product is likely to be profitable within the parameters set by the TOR, the objectives and/or the protocol.
If the projections show that the product is not likely to be profitable, changes can be made to the design
of the product before the Test. The price you set for the product should produce a net profit for the
institution after an agreed upon period.
Once the projections are accepted, the price is set, and the Test is implemented, the projections can be
tracked against actual results and adjusted periodically (generally quarterly) based on actual data
according to the Testing Protocol.
For example, how long will it take under a low growth scenario for the product to break even?
3. What would the impact be if we managed to become more efficient in our service delivery and
average transaction time was cut by 30 seconds
Sensitivity analysis is an excellent way to understand the importance of different variables to the
profitability of the new product.
Given the nature of the sources of the projections it is advisable to commence with a set of customer
prices (fees and interest) and institution costs (cost of funds and operations) that clearly provide an
adequate level of profit for the institution. It is always easier to reduce the price to the client, once you
find that you realistically can without harming the profitability of the product, than it is to increase the
fees and interest charged once the product is offered.
Financial modelling is a critical step and will likely be the most time consuming of all the steps in pilot
testing as well as the most revisited. It is very important that the assumptions be well-derived, and that
the financial projections are as accurate and realistic as possible.
The result of doing this all this work is a much better chance of success!
4. Projection Models
Time: 15 minutes
Slides: 3
15
The revenue with regards to a loan product is derived from fees charged to the customer and interest earnings on the loan itself. The expenses
are related to the operational costs of delivery, servicing, and managing the loan as well as an allocation to a reserve for possible loan losses.
The income with regards to a savings product is derived from fees to the customer and earnings on the investment of the customer’s deposits.
The expense is related to the operational costs for the MFI to market, manage and service the accounts as well as the interest paid to the customer
on their deposits.
Q: What are the key issues that we should look for in a loan or
savings product projections model?
A comprehensive loan product financial projections model will have several key features. Look for these
when choosing a model. They include:
• Basic factors for growth of volume and value of the account
• Detailed cost factors for all related operations, including staff and set-up
costs as well as fixed assets acquisition (for cash flow and depreciation
calculations).
• A factor to calculate drop outs and un-collectable interest in loans, and
close-outs of savings accounts
• A discount factor to calculate the impact of inflation
• The ability to make general periodic cost adjustments (such as regular
scheduled salary increases).
• A factor to account for product cannibalisation:
• Loans: when customers leave one loan account for another within the same institution,
resulting in a net zero change in institutional assets
• Savings: when clients move deposits from one account to another, resulting in a net zero
change in institutional deposit liabilities
• Costs by transaction type:
• Loans: cost of disbursements and payments as well as other transaction paperwork
• Savings: cost of deposit, withdrawal, and other transaction paperwork
• The ability to project loan disbursements and payments
• Flexibility in setting interest rates depending on balance amounts and duration if required by your
products
• An allocation for indirect costs based on the MFI’s indirect cost rate.
• An allocation of direct costs to the product from non-branch sources (such as cost of the General
Manager’s time overseeing the product). This often requires a general ongoing costing program
within the institution.
• All other costs of the product (from fully loaded staffing costs to cost of funds)
Indirect costs are those general costs that the company incurs related to its overall operations that
cannot be easily allocated to one product or another. Such as: a portion of the annual audit, a
portion of the maintenance costs of the headquarters photocopier, or a portion of the accounting
department’s costs to cover the costs of accounting for the product.
• A mechanism for not only tracking month-to-month break even, but also for tracking the
cumulative net present value of the product so you can determine when the product has actually
broken even.
• The data input should be tied to a graph or series of graphs to make it more easily understandable.
• The ability to track income from interest investments, fees and any other relevant related sources.
In this exercise participants are split into groups around different computers, ideally there should
be no more than four people per computer, otherwise it can be very difficult for all participants
to participate fully in the exercise.
Initially the AMC Flexi-loan account looked profitable, then the T Bill rate fell and major
competitors reduced their loan interest rates to 12%. AMC’s board have decided that AMC
should also set its interest rate at 12% and still aim to get a positive NPV on the flexi-loan within
24 months of its launch
Allow participants 1 hour for the exercise and allow 30 minutes to make presentations.
5. Conclusions
Time: 15 minutes
Slides: 4
In conclusion, do not lose sight of the key issue: Does the product “work” in terms of pricing? The
price needed to achieve profitability may be too high making the product un-saleable. If so, Team should
decide to cancel the Test.
Don’t forget: The product must satisfy both the institutional and customer objectives to work
Remember, the protocol must identify “killler” parameters that will result in immediate action by the
team, which may be corrective or terminal to the test. For example:
Protocol reporting is not on schedule
Profitability target has shifted by more than 20% beyond original targetsConsistent month-to-
month break-even point revised to a point >2 years
Session objectives:
• Ensure an understanding of the need for documenting the changes in policies and procedures, in all
offices of the institution – front and back office
• Understand how process mapping ensures proper documentation of a new product
Overview: This session ensures that all relevant changes are made to the policies and
procedures of each office, department and individual involved in, or affected by,
the new product. This is also an opportunity to ensure that feedback and buy-in
is achieved throughout the organisation. Process Mapping will also introduce
participants to a detailed method for ensuring that new products (and existing
products) are fully understood and integrated in to the MFI’s P&P manuals.
Process:
1. Why Is Documentation Necessary?
Time: 10 minutes
Slides: 5 (including 3 introduction)
Your Pilot Test Team has carefully defined all product objectives based on the desired product
characteristics, the financial projections, and the MFI’s need for the product to not only break even, but
be profit-generating as well.
Now your Team is ready to document the product definitions and procedures.
• Marketing
• Technical operations
o Accounting
o MIS/IT
In fact, before beginning the pilot test it should be in “near final draft” form. This is
so that it will be comprehensive enough for the implementation of the test, yet still a
“draft,” so managers are comfortable making reasoned adjustments. The realities of
the product test will teach new lessons on implementation, which should then be used to update and
further clarify the draft.
The document should be written in three parts: Front Office Operations, Marketing, and Back Office
Operations.
This section should detail all front office procedures, including all procedures that the cashier or teller, as
well as the supervisors, will follow. Include detailed instructions on how to use the product-related forms,
such as deposit and withdrawal slips, passbooks, or other related documents. Document in detail the
procedures for each different process relating to the product.
Examples of the procedures for a deposit transaction, and a loan transaction are presented in the
following pages. These procedures would be documented and included as part of the Pilot Test Policies
and Procedures Manual for the savings or loan product that your institution is offering.
(From the New Savings “near final draft” Policies & Procedures)
2.2: Customer hands cash/cheque, FASA Card, and deposit slip to the cashier.
2.3: The cashier:
2.3.1: Confirms the deposit by counting cash, or by reviewing check as per policy and
setting them in a secure place on the cashier work table.
2.3.2: Prepares cash-in ticket.
2.3.3: Confirms the details of the deposit slip by comparing with FASA card details.
2.4: Cashier calls up Option 3 “Enter Deposit” on the FASA-Soft transaction software
system. Enters information from the deposit slip onto the computer form. Complete all
required fields. After entry, confirm and then press “enter.” A copy of input screen is
provided as Sample D-2.
2.5: Cashier stamps the deposit slip and counterfoil with the dated cashier stamp and:
2.5.1: Gives the stamped counterfoil and FASA card to the customer (the transaction is
now complete for them)
2.5.2: Puts the original deposit slip in the transaction holder, places the cash or check in
the cash drawer. The transaction is now complete for the cashier.
4.4: Cashier calls up Option 2 “Enter Manual Loan Payment” on the Flexi-Loan system.
Enters information from the Manual Loan Payment slip onto the computer form.
Completes all required fields (those with a *). After entry, confirms and then presses
“enter.” A copy of this input screen is provided as Sample LP-4.
4.5: Cashier stamps the payment slip and counterfoil with the dated cashier stamp.
4.5.1: Gives the stamped counterfoil to the customer (the transaction is now complete for
them)
4.5.2: Puts the original payment slip in the transaction holder, places the cash or cheque in
the cash drawer. The transaction is now complete for the cashier.
2. Process Mapping
Time: 75 minutes (60 minute exercise)
Slides: 10
MicroSave’s “Process Mapping” Toolkit provides detailed descriptions/ guidelines on how to optimise
the process mapping exercise in your institution
Cash Cash
Cash Cash
Process Customer walks into the Customer hands deposit Cashier counts cash, compares Cashier calls up “Enter Deposit” Cashier stamps deposit slips, returns
banking hall and slips, cash and FASA cash to deposit slip, compares on FASA Soft. Cashier enters deposit slip 1 to customer, with FASA
completes deposit slip Card to teller deposit slip to FASA Card and deposit slip information into the card, places cash in cash draw and files
in duplicate showing prepares cash in ticket required fields. deposit slip 2 in transaction holder
amount, name and
account number
Risk Fraud risk that Transaction Risk that teller Transaction risk that teller enters
customer deposits fake deposits incorrect amount or in amounts incorrectly on FASA
notes into his / her incorrect account Soft
account
Control Tellers are trained to Cash must tally with deposit slip, End of day cash to system reconciliation
recognise fake notes. cashier has to stamp and sign
deposit slip.
Flexi Flexi
Loan Loan Till and
File
Description Customer walks Customer hands Flexi- Cashier counts cash, Cashier calls up “Enter Cashier calls up Option 2 Cashier stamps Flexi-Loan
into the banking loan payment slip in compares cash or Manual loan repayment” “Enter Manual Loan payment slips, returns
hall and completes duplicate and cheque amount to on Flexi-Loan main menu. Payment” on Flexi-Loan Flexi-Loan payment slip 1
Flexi-loan payment cash/cheque to cashier payment slip, and Cashier enters customer’s system. Enters information to customer, places
slip in duplicate prepares cash in account number and from Flexi-loan payment cash/cheque in cash draw
showing amount, ticket confirms information on slip into the computer form and files Flexi-Loan
name and account payment slip: payment and confirms by pressing payment slip 2 in
number amount and account “Enter”. transaction holder
number.
Risk Fraud risk that customer Transaction risk that Transaction risk that teller
deposits fake notes into teller deposits inputs incorrect account
his / her account Fraud incorrect amount or information
risk that cheque payment in incorrect account
is not cleared by bank on
which it is drawn.
Control Tellers are trained to Cash/cheque must Confirmation of payment
recognise fake notes. tally with payment amount and account
Cheques only accepted slip, cashier has to number
from “Gold Star” clients. stamp and sign Periodic Flexi-loan ledger
No accounts are updated payment slip. to customer payment slip
until cheques are cleared. reconciliation
You are a partner in Ernest Anderson, an audit company, and have been asked to provide advice to the
directors of Nairobi Building Society on how their current service time can be reduced
You have 45 minutes to review and improve the Nairobi Building Society processes
An example of the account number and code listing section of a Pilot Test Policy and Procedures Manual
follows:
Account Numbers and Code Listing 16
Transaction
Transaction Type: Account Number: Transaction type:
Code:
FASA Cash Deposit 400 2-100-40 CR
FASA Check Deposit 401 2-100-40 CR
FASA Transfer Deposit 402 2-100-40 CR
FASA Deposit Reversal 409 2-100-40 DR
FASA Withdrawal 410 2-100-40 DR
FASA Withdrawal Reversal 410 2-100-40 CR
FASA Deposit Fee 435 3-401-40 CR
FASA Withdrawal Fee 436 3-402-40 CR
FASA ID Fee 438 3-400-40 CR
FASA Fee Reversal 439 3-409-40 DR
FASA Interest Posting 420 4-250-40 DR
FASA Interest Reversal 429 4-250-40 DR
FASA Marketing Costs 4-530-40 DR
FASA Pilot Test Expenses 4-585-40 DR
Transaction code series 400 is allocated for the FASA account (300 for the Fixed Deposit, and 200 for the regular savings). These codes
match the codes for the other account types (for example: a regular savings withdrawal is code 210).
Transaction code series 700 is allocated for the Flexi-Loan (600 for the Our-Way loan). These codes match the codes for the other
account types (for example: a regular loan disbursement is code 210).
Account numbers are in the format W-XXX-YZ, where W is the general balance sheet category (Assets = 1, Liability = 2, Income = 3,
and Expense = 4), XXX is the specific account number for the general transaction (ID fees = 438 for all accounts), Y is the designator
for the Flexi-Loan, and finally, Z = a location indicator (3 = the city branch where the Flexi-Loan is to be tested). Most institutions do
not allocate a Reserve to a specific account, thus the code “00”. Costs for the test are allocated location code “9” for product
development.
Q: Account numbers are in the format X-YYY-ZZ, where X is the general balance sheet category (Liability = 2, Income = 3, and Expense
How relevant is our choice of systems to the procedures
= 4), YYY is the specific account number for the general transaction (ID fees = 438 for all accounts), and ZZ is the designator for the
FASA account (regular savings is 20, fixed deposit is 30).
manual?
Note that all of these procedures are relevant regardless of the type of systems in operation. Whether your
system is computerized, manual, or hybrid, it is critical that all relevant staff understand their role and the
specific details of the activities they are implementing. Management Information Systems must be in
existence regardless of the institution’s complement of computers. The procedures should simply reflect
the reality of the resources, and infrastructural strategies within the organisation.
16
Reflects accrual based accounting (although fee income is not accrued), and transaction codes are utilized when transactions relate to an
individual’s account.
Session Objectives:
• Determine who should receive training within the institution – and how much training they should
receive
• Decide who should conduct the training, and what training methods they should use
• Develop a training and launch plan
• Ensure that relevant computer training is considered and developed
Handouts:
• Handout 10.1a AMC Flexi-Loan Pilot Test Training and Launch Plan
• Handout 10.1b AMC Fast Access Savings Account Pilot Test Training
and Launch Plan
Overview: This session will ensure that the Pilot Test team adequately determines what the
needs of the MFI are – and that one, or more, of the team is prepared to conduct
the training in an appropriate way (role playing to memo writing, for instance)
for all of the staff impacted – from front office cashiers or loan officers to back
office accountants or clerks… and not forgetting the managers “upstairs”.
Process:
1. Training and Launch Plan
Time: 45 Minutes (20 minute exercise)
Slides: 9 (including 3 introduction)
Even with all the planning and preparation done in Steps 1 through 6, without proper training of staff the
Pilot Test likely will be disastrous. Your staff will be only as good as they have been trained to be.
Nothing makes a worse impression on your customers than staff who do not know the product they are
trying to sell, do not know the proper information to offer customers, or do not know how to assist the
customers in opening or transacting new loan product accounts.
Many MFIs have misunderstood the necessity of training ALL of their staff well! Here are some of the
things that can happen when staff don’t understand the new products:
1. An untrained – and/or unconvinced - bank staffer may think that a new product will cause more
workload or “hassle” to her job. Therefore, she doesn’t even attempt to sell the new product…
and the pilot test results are jeopardised.
2. The accounts officer doesn’t “separate” the accounts for the new products – the pilot test results
are jeopardised.
3. The loan officer doesn’t know anything about the new savings product being advertised at the
MFI. The client puts her savings in a different MFI…the pilot test results are jeopardised… and
the client doesn’t have much faith in the loan officer’s knowledge!
Q: How long should the training last, and how detailed and
extensive should it be?
As detailed and extensive as is appropriate.
• Detailed and extensive training is necessary for tellers/cashiers or loan officers and supervisors.
It is also important to involve Head Office staff and to provide them some overview training on the new
product – this will reduce the likelihood of the new product being misunderstood/under-valued by staff
not directly involved with it. There should be one person from each area in this overview training. Those
trained should return to their departments and brief their co-workers. From that briefing they will, within
their departments, finalise their activities concerning the new product.
For example, the internal audit attendee would return to her department and brief the staff there. From the
briefing the audit staff would develop the plan for their audits of this product in the test site.
The different staff outlined above will need different levels of training – as outlined broadly in the table
below.
When a test is just beginning for a new product, you may need only a couple of credit officers trained to
service the new loan type. However, it is inefficient to train one or two members of staff at a time.
Plus, by training only the initially needed staff there is a risk to the MFI and to the Test. The risk is that
by training only two cashiers/tellers or credit officers, there is not enough “depth” or collective
knowledge in the Test staff to accommodate any problems that might arise. If one cashier is absent, will
the 10 minute savings goal be lost because no one can take his place?
It is best to train several additional staff as well as the two who will
actually participate in the Test. In the worst case, these extras can replace
any credit officers/cashiers who do not work out or who decide to leave
the MFI in the middle of the Test – or in a less drastic situation, who are
simply out ill. In the best case, you have credit officers trained and ready
for the next site in the expansion. Additionally, in your MFI, as in many,
there might be competition among staff to be selected to implement a new
product. You can use the training as a means of selecting the best
candidates to test the product.
If your MFI is small, your Pilot Test Team should decide together: who is the most appropriate person to
design and conduct staff training? This is likely to be the Product Champion, or the Team Leader. It may
not be cost effective to hire an outside training firm to train the initial testers of the product. However,
once the Test has been run and the product lessons can be integrated into the roll-out training program,
this may be a time to use external trainers to formalise the curriculum and train the rest of the staff.
One MFI had a new product training team of three: one each from Operations, MIS and Marketing.
They went to the pilot testing branch on a Saturday afternoon and conducted after hours training. They
stayed until Tuesday and conducted hands-on training, and after hours training, for those two days as
well. The staff felt comfortable that they understood the Marketing, MIS and operational aspects of
the new product. They also felt that they knew how to correct the –inevitable- mistakes that would be
made during the launch of the new product.
Role Play Issues for Loan Customers Role Play for Savings Customers
• Marketing the loan product, • Marketing the savings account,
• completing the application, • completing the account opening documentation,
• receiving the disbursement, • making a deposit,
• charging fees, • withdrawing,
• delinquent payments, • preparing the identification,
• loan default, • charging fees, and
• explanation of the interest rate, and • whatever other situations are relevant to the product.
• other situations which are relevant to the
product.
Covering Problems Covering Problems
transaction errors, client complaints about a credit Transaction errors, Lost identification, client complaints
officer, rejection of a loan application about a cashier
It is often helpful to have the MFI trainer participate in the first few role-play scenarios as either the
customer or the staff person. This allows the trainer to show the staff-in-training how the role-playing
exercise should work.
Another strategy is for the MFI trainer to encourage trainees to create difficult issues and anticipate
customer questions so that the whole training group can work through solutions. This method should be
repeated until the relevant staff members are completely comfortable with the product, its procedures,
and how to work with customers regarding the product.
The group may also choose to role play the role of the accountant or supervisor and go through an error
and correction.
Depending on number of groups, have them act out their play in front of the others.
A computer trainer at an MFI said that in the first lesson he taught, he always unplugged one computer,
and left one computer turned off. When all the students pressed the computer keyboard to bring their
screens to life, those two computers would not come on. The trainer would insist that the MFI staff
could fix the problem without him. This sometimes took ten minutes or more until someone finally
realised the computer was unplugged or simply not turned on! Likewise, clearing a paper jam,
changing toner in a printer, checking that wires were connected properly were all as necessary in the
training as teaching the actual computer commands and skills to complete the loan or savings
transaction. He also reminded management that most people new to computers also don’t know how to
type. Investing in a quick typing course could speed up transactions instead of allowing for someone to
“hunt and peck” for each letter in a clients name!
Training for real life situations can be achieved very effectively using simulated transactions. The
trainers and the computer technicians can achieve this by creating a “training function” in the MIS. This
will allow the staff to practice on the computer system as if the transactions were real, however, the
transactions will not actually appear on the MFI’s accounts. This will remove some of the pressure staff
will feel in using the new computer system by allowing them to make – and correct – mistakes, without
fear of causing problems to the bottom line!
Both customers and staff will be extremely frustrated As discussed earlier, correcting a transaction
if the computer system slows them down or causes error should involve a supervisor’s
problems, instead of the expected fast and accurate. assistance/ authorisation, as internal controls
Staff MUST know how to correct all sorts of errors – would warn against general staff being able
from a printer’s paper jam or a transaction error. to cancel or void a transaction.
Make sure that, for the first few live interactions with customers, the trainer is nearby to assist staff in
those encounters. This will help your staff feel more comfortable and less “alone,” and will ensure that
customers receive the quality of service they expect from your institution.
Exercise
Time – about 40 minutes
Handout 10.1a and 10.1b – the pilot test training and launch plans for both the AMC Flexi-loan product
and AMC Savings product. Ask the group(s) to look at the plans and then to create their own launch plan
(on their computers if they have them, or simply on a piece of paper, or a flipchart) using Handout 10.1b
in the Workbook.
Make sure that the group realises the impact of the launch plan on their overall team – including again –
cost of overtime (if paid) for after-hours training, cost of transporting staff to/from pilot test branch, cost
(financial or otherwise) in having team members out of their office and working in the pilot test branch
for several days, etc.
If time permits … The groups may present their launch plans if time
permits, but instead, the trainer may lead a guided discussion on the
Idea:
“problems” and “solutions”, for example:
If we are stating that we will have 6-8pm hours for training, what should
we do if the trainers are located in a Head Office two hours away from
the pilot test site? Do we need to include hotel expenses?
Discuss other expenses such as – what incentive should be offered to the staff (and trainers) for working
additional hours?
Alternatively if your participants do not have a product ready to test you can use the hidden slide
Exercise 10.1 “What Training for Whom” and ask them to complete the preliminary training
planning matrix.
Session Objectives:
• Be able to develop a core marketing strategy; Understand the terms, and develop the tagline,
Unique Selling Proposition , the Benefit Statement and the Positioning Statement
• Develop a sales strategy using appropriate promotional materials
• Create a marketing strategy systematically, and a way of measuring its effectiveness
Process:
1. Simple Pilot Test Marketing Plan
Time: 75 Minutes (45 minutes exercise)
Slides: 16 (including 3 introduction)
Your MFI has a new product, and your Team has developed a testing protocol, defined
objectives, identified systems, modelled the financial projections, as well as
documented the procedures, and trained the relevant staff. The next step is “getting the
news out.” That’s what customer marketing materials are all about – getting the news
out to customers that you have a wonderful, new product that will solve some of their
problems. It also includes all those unique activities and stationary that relate to
customer service.
Each strategy is interdependent, good products, help to build a great brand, and a great brand will attract
customers for new products and services whilst excellent customer service and delivery significantly
increase sales.
Q: How do we start?
First of all, design and document an overall Marketing Plan for the Test. The Marketing Plan can consist
of a simple, written outline of:
• Background:
Macro-Environmental Analysis
Micro-Environmental Analysis
Institutional Self-analysis
• Conclusions and Key Assumptions See MicroSave’s Product Marketing
• Strategic Objectives Strategy Toolkit for a detailed description
• Core Marketing Strategies and example of a Marketing Plan.
• Key Product Policies
• Activities and Results Expected
• Administration and Control/Budget
• How the Results will be Tracked and Analysed
The Strategic Objectives of the Fast Access Savings Acct. are to:
• Break even within 24 months of the start of the test
• Maintain customer time in the branch to < 10 minutes
• Enlarge areas customer base by 10% over two years.
Selling products is made considerably easier when approached in a systematic manner. There is a
relatively straight-forward method for preparing the key messages for a product marketing strategy. This
approach is built on taglines, ultimate selling propositions and benefit statements – see the Example 8.2
Roles of Different Core Marketing Strategy Components for the roles of each of these components and
how they fit together. Each of these components should be developed on the basis of market research to
assess clients’ needs and expectations, and then quickly tested on the target market using Focus Group
Discussions prior to the pilot-test.
Your customers are looking for the end BENEFIT STATEMENTS ARE
result. It is important to remember that CENTRAL TO THE SALES
customers do not buy products and EFFORT:
services; they buy benefits or value they Every marketing book relates that the
expect to derive from them. It is therefore customer looking for a drill is not
important to list out the key product really looking for a particular piece of
attributes and translate them into benefits to equipment - he or she needs a hole in
the customer. These benefits should reflect something.
the results of your MFI’s market research
and understanding of the needs of the target
market.
Exercise
Time – 45 minutes
Participants should look at Handout 11.1a and 11.1b and create their MFI product’s Brand Name,
Tagline, Unique Selling Proposition (“the difference that makes the difference”) and Benefit Statement
Spend time reading the “Role” column in the tables. Understanding the role of the Brand Name, Tagline,
Unique Selling Proposition (USP), etc. is essential to creating effective statements.
Have the groups present their Brand Name, Tagline, USP, Benefit Statement to the others. The
participants should critique them well –explaining their own interpretations of the Brand Name, tagline,
etc. to ensure that the MFI is being understood as they wish to be.
Alternatively if your participants do not have a product ready to test you can use the hidden slide
Exercise 11.1c “MyMFI LeaseLoan Final Prototype” and ask them to develop the name, tagline
and benefits for the product.
A push-based strategy uses a sales force to push the product through the following channels:
Personal selling
Direct marketing
The options in striking the balance between these strategies can be shown graphically as follows:
Public Relations
Personal Direct
Selling The Marketing Marketing
Communications
Mix must give
consistent, clear
compelling
company &
Sales product messages
Promotion Advertising
The message of your promotional materials should focus on the benefits the product offers the customer
– and these benefits should be based on the results of the market research you conducted to design the
product prototype in the first place. Do not simply publish a list of the product features or components.
The product was designed to respond to specific customer needs (as well as institutional needs). Use
those needs and your solution to them (the benefits of the new product) to promote the product.
The objective of the promotional materials is to get potential customers to at least inquire about the
product at the branch, and at best utilize it. You cannot be reasonably sure that the promotional materials
you have designed will have that effect on potential clients until you test them.
Although you want to have enough materials to cover demand, be careful about what
information you put on the material. If you are even slightly unsure about the start date of the
product – don’t put it on the material. If you anticipate that product features may change
slightly, then don’t refer to that feature instead write “see your MFI customer service
representative for more details”.
Many Banks and MFIs allow old materials to sit around, giving people mis-information and
causing bad feelings (They said the rate was 7% and it’s really 8%!). Worse is promotional
material that has tape, “white-out”, black marker, etc. covering up wrong information!
Or, try something like this to promote the tailored-for-the-customer benefit of the Flexi-Loan:
How long did you wait at the bank for your last
withdrawal?
Of course, once you get customers in the door you will need to prove your advertisement, so make sure
your service is as fast as your promotional materials claim. Do not advertise anything that you cannot
provide. If you mention your competition in your promotions, make sure that your claims about them are
true, and that your product really is better.
It is important to remember that on all promotional materials you should indicate clearly that you are
running a Test and in which branch you are running the Test. Do all you can to minimize the market
confusion that related branches might suffer from your marketing campaign.
When promoting a product in a Test you will need to be somewhat careful. Of course, you will want
people in the Test market area to know about the new product. At the same time, you do not want to be
overwhelmed in the first few days of the Test by too many unplanned-for customers. Too many
customers can result in delivery problems that will give the initial market a poor impression of the
product. If your customers have a poor experience, they will convey this to all their friends, and this can
mean disaster for the product.
Also, do not promote the product in non-Test Branch market areas of your MFI. This may seem
like common sense, but it can happen quite easily. Someone thinks “Let’s advertise in the newspaper
and on radio” and in the excitement, it gets done.
That might be OK if the newspaper or radio is confined to one market area, but very often,
newspapers are national or regional and non-Test Branch clients end up reading the same advert as
Test Branch clients. When they come for the product, the poor manager and staff have to explain again
and again to angry customers that the product is not available at that branch.
Your non-Test Branch staff should be able to explain the product –at least in broad terms - to those
that ask (maybe their brother/sister does live in a Test market area) and should also be able to explain
that the new product is only in the testing stages and that all clients will be informed if the product is
going to be offered there.
Finally, do not have too large a promotion with lotteries and raffles and expensive give-aways. Save
those for the full rollout. Do not create a situation in the Test where customers are using the new product
for reasons significantly beyond their actual interest in the product itself. If this happens, it is difficult to
measure the real popularity of the product, as opposed to the marketing. The Test results could be
unreliable, and create a false impression of the market and institutional expectations that will not be
sustainable on rollout.
While all normal mechanisms of the institution’s marketing policies should be employed, it is important
that the regular marketing program of the MFI be translated as closely as possible to the Pilot Test
marketing. 17 Thus, for example, if your MFI normally uses posters and brochures to advertise its existing
products, this should be done for the Pilot Test product also. The Test should measure the level of
customer interest in the new product given relatively normal marketing practices. When, and if, the
product gets to a full rollout phase, that is the time for a large marketing kick-off.
One MFI was so excited about its new product it wanted to have a major gala and launch party. An
International Partner representative was to fly in, other country programs would send senior staff and
an international Guest of Honour was proposed.
But, the pilot test was designed to be quite small, and, in a small town branch. This kind of event
would have been the “party of the year” in such a town! The interest generated in the party event
would have vastly overshadowed the product itself. It could have made non-eligible clients and
potential clients quite upset, too - they wouldn’t be able to utilise the new account. The Pilot Test
Team Leader suggested that instead they save the big event for the Roll-out of the product.
17
G. Gruenwald. How to Create Profitable New Products, (Chicago: NTC Business Books, 1997). p. 340.
A different product might call for focusing your marketing efforts on attracting new borrowers.
After your Team has decided on the focal market, look at how you inform people within the Test market
catchments area of product changes, and at how your MFI markets products to new customers. Consider
having occasional localised public meetings. Encourage staff to promote the MFI in the markets and on
the streets. The manager should be making purposeful marketing visits to potential customers to inform
them of the MFI and its products and services. All these activities are appropriate for the new product.
If your new account is available only for maize farmers – for example; it would make sense to advertise
where you would find maize farmers. Input supply shops, an NGO dealing in maize, etc. A public
meeting calling only maize farmers. A one-on-one visit with a well-respected, well-connected maize
farmer, etc.
If your focus is on attracting new customers, you might want to have public meetings among potential
borrowers to promote the product. Hang informative posters in the catchment area. Unless there is a
highly localised media that can promote your new product strictly within the Test market, it is unlikely
that the media would be an appropriate mechanism for Test promotion. Even if it is localised, you might
want to wait until the second or third month to begin that level of advertising. This gives you time to get
the initial problems out of the implementation before so many more are informed about it.
Whichever kind of marketing you do to advertise your new product should be designed to address the
specific market that the new loan is designed to attract. Not all of these areas are appropriate for every
product or every market.
2. You’ll also need printed materials for the new loan or savings products, primarily this will
include Operational Stationery.
The operational stationery for the new product will include: loan application documents, payment slips,
some form of periodic customer statement, and possibly others. These should be easily distinguished
from operational stationery of other products. Commonly, this is done using different coloured paper. It
should also be simple and efficient for customers to complete. Do not make customers answer the same
question more than once, and eliminate needless information requests. Ask only for information that is
necessary for processing, security, and decision-making.
Operational stationery can also be used to gather critical marketing data. Loan application forms should
be used to gather data about the client and his/her business as well as where s/he heard about the product
and what prompted s/he to use it.
AMC Collects the following information on its loan application forms using
a very simple “tick-the-box” survey instrument.
Demographic profiles:
Marital status _____________________
Age _____________________
Education _____________________
Income _____________________
Employment _____________________
Where the client lives _____________________
What languages they speak _____________________
What is the client’s level of education _____________________
What newspapers or magazines do they read _____________________
Do they have TV or radio _____________________
What they do for entertainment etc. _____________________
Product usage patterns:
Which products do they use in AMC _____________________
Which products do they use in other financial service organisations _____________________
For what do they use their current financial services _____________________
Satisfaction with AMC:
Efficiency _____________________
Politeness _____________________
Ability to communicate clearly _____________________
Value for money _____________________
Make sure that the participants understand the use of operational stationery
as a data collection tool. Understanding (for example) where clients live,
what newspaper or magazines they read, etc. will give the MFI a good idea
as to where to advertise. Understanding the client satisfaction with the MFI
will also allow the institution to promote the positive… and correct the
negative.
• What other information may be appropriate for your MFI?
• How will you track this information?
• Will you have to change your existing way of doing
business in order to collect the information? Do you need
to add this into the Policy and Procedures?
• What other issues?
You can also conduct Focus Group Discussions. Though they require special skills, these qualitative
techniques can be superior to the questionnaire type assessments because they allow for the possibility of
gaining greater insights and allowing for a better exploration of issues.
3. Where did you learn about the Flexi-Loan? (or Fast Access Savings Account)
a. Posters
b. AMC staff (Name: _______________________________)
c. Another AMC customer (Name: ____________________)
d. Meetings (Where? __________________________________)
e. Marketplace Event (which? ___________________________)
f. Other ________________________________________
The first question will help management know if customers have been attracted to the MFI because of
this account. This data quantifies the satisfaction of an objective related to numbers of new borrowers
versus current borrowers shifting to the new loan type.
The second question provides basic data that enables the tracking of customer levels by account type and
balance. Once you have some data on the customer’s other activities with the
institution, this information provides a good idea of who is using this new loan
product.
The third question tracks the effectiveness of the marketing efforts. This is
critical for any MFI that is spending money on advertising. With some historical
data, management can identify the most effective advertising media for reaching
potential customers.
This question also aids in the identification of specific staff persons or customers
to whom the MFI might want to show some appreciation. It is becoming more common for MFIs to pay a
small commission to staff who generate new customers, or to show appreciation to existing customers
who assist in new customer generation, so this is especially
important if staff people are promoting the new loan See MicroSave’s “Designing Staff
product. By virtue of their position as responsible for all Incentive Schemes” Toolkit for more
activity in the institution, senior management should be details on this complex issue.
excluded from such specific incentives, though general
incentives for reaching objectives could be considered.
Questions four and five help management to identify where the borrowers are coming from. Identifying
geographic clusters of customers can be useful in future advertising, product development, and
determining suitable locations for future branches.
This type of questionnaire, and the data it seeks to generate, is very flexible, allowing an MFI to ask
questions relevant to its operations and information needs. It can be a useful tool for gaining better
information on the potential customers.
Further, if no one in the MFI is reviewing and using the results of the analysis, then the MFI will have
wasted the customer’s and the analyst’s time. This data can help management to make informed
decisions about its customers and their needs. For it to be useful, the customer must respond honestly, the
data must be analysed in a timely and comprehensive manner, and the results need to be used by
management. Many organisations will also supplement this data with Participatory Rapid Appraisal
(PRA) techniques 18.
Exercise
Alternatively if your participants do not have a product ready to test you can use the hidden slide
Exercise 11.2 “Assessing Marketing Activities” and ask them to help the CEO of MyBank make
sense of the marketing assessment data.
18
For a guideline and introduction to PRA see: Graham A.N. Wright, Shahnaz Ahmed, and Leonard Mutesasira. Participatory Rapid Appraisal
for MicroFinance – A Toolkit, MicroSave, Kampala, Uganda, 1999.
Session Objectives:
• Ensure that participants realise that, though a seemingly “short step”, commencing the pilot test
requires a full review of Steps One through Eight.
Time: 30 minutes
Handouts:
• Handout 12.1: Monitoring Different Objectives.
Overview: The pilot test is ready to begin. Final reviews of all prior steps needs to be done.
All the appropriate parties need to be notified of the commencement of the pilot
test. The pilot test protocol should be reviewed to ensure appropriate monitoring
has been planned and budgeted for.
Process:
1. Commencing the Pilot Test
Time: 30 Minutes
Slides: 13 (including 3 introduction)
If you have followed this Tool Kit step-by-step, then you have compiled a Pilot Test
Team, developed and followed a testing protocol, installed all needed systems, modelled
the financial projections, defined product objectives, documented product operations and
procedures, trained all relevant staff, and developed customer marketing materials.
You and your team have surely worked very hard and have accomplished a great deal by
getting this far!
The tools which can be used are described in the table below and are given as Handout 12.1 Monitoring
Different Objectives.
The Pilot Test Team should meet and make a final review of all steps. Once the review is complete and
the Team is satisfied that the requirements of all steps have been fully satisfied, the Team has two
additional tasks to complete before the Test commences.
1. The first task is to draft a formal letter to the MFI’s senior manager reviewing the preparation steps
and informing him/her that the Test will begin as per the protocol.
2. The second is to draft an abbreviated letter to the managers of all branches and department heads to
inform them that the Test is commencing. This note should include summary information about the
product being tested and the site and timeline for the Test. It is important that all managers are aware
that a new product is being tested so that they will understand new information that comes available
and questions that their own customers might ask. In addition, it provides a formal notification to
department heads to be prepared for any relevant activity within their departments concerning the
new product.
3. Once the notifications are delivered, the Test should begin as structured in the protocol and Test
guidelines.
Session Objectives:
• Understand the importance of developing a tracking system to ensure that data is collected from the
appropriate people/departments at the appropriate times
• Ensure that the data is analysed focussing on the impact of the product on the institution’s
profitability
• Understand the choices that may be recommended to Management – continue the test, expand or
roll-out the product, terminate the test
Handouts:
• Handout 13.1: AfriCo Pilot Review Protocol
• Handout 13.2: AfriCo Staff Questionnaire
• Handout 13.3: AfriCo Marketing Review
• Handout 13.4: AfriCo Training and Support
• Handout 13.5: AfriCo Physical Infrastructure
• Handout 13.6: AfriCo Mystery Shopping Guide
Overview: This session concludes the Pilot Test Process. After analysing the data that is
collected from the test, comparing it to the projections and determining its
impact on the profitability of the institution, the Pilot Test Team will recommend
that the product: be rolled out (best case); be tested further to ensure that results
reflect the product results as would be rolled out; be terminated (also a best case
– the institution has just saved itself from a costly mistake!)
Process:
1. Successful Monitoring
Time: 10 minutes
Slides: 5 (including 3 introduction)
bi-annually. The danger in this case is that if performance is measured only after a six-month interval
much that could have been learned has been lost - opportunities to make refinements and to test those
refinements have been passed by.
Immediately after launching the pilot test the product development team normally issues a collective sigh
of relief. Everything necessary for making the product operational has been done. However, the
operational phase of the pilot test should test the:
a) The monitoring budget: The monitoring budget needs to be sufficient, both financially and in
terms of time to enable appropriate findings to be made, documented and acted upon.
b) The experience of the monitor: Monitoring a pilot test requires a broad range of knowledge
encompassing operations, marketing, systems and procedures, customer service. Given this
requirement monitoring for most organisations will be a team event.
c) The tools used by the monitor: Monitoring can be made more effective if appropriate tools are
used these include, checklists, surveys, mystery shopping guides, Focus Group Discussion guides
etc.
d) The familiarity of the monitor with the product: To be effective the monitor must possess an
intimate knowledge of the product and its features, the assumptions on which it is built, the
policies and procedures followed etc.
e) Focus - Recording findings and making recommendations: Finally, a monitor needs to actively
record findings and make recommendations so that appropriate revisions can be made.
f) Follow up – Ensuring action is taken against agreed recommendations: Paradoxically, agreed
recommendations are sometimes not taken which generally leads to delays in the pilot test.
g) Capacity to interpret the initial results of the pilot test: An inexperienced monitor may easily
misinterpret the initial results of the pilot test.
In response to difficulties ARPs had in monitoring their pilot tests MicroSave developed a protocol for
pilot test review missions. Alongside this there are a number of simple monitoring tools that can be used
to measure progress against specific objectives – see Table 10 for details.
Launching the Test is just the beginning. This is why we call it the
“commencement” of the Pilot Test.
Your Pilot Test Team must now continue their work as they monitor and evaluate the performance of the
new product. This is done through collecting and analysing information.
If your Team has completed Steps 2, 3, 4, and 5 carefully and diligently, this should not be
complicated, but will require time and thoughtful analysis of the data, compared with the
needs of the Test protocol.
The Pilot Test Team must continually evaluate the value of the
product to the MFI in terms of profitability and customer service.
The critical question for them to ask continuously during the testing
process is:
Summary reports should be provided to the Team members monthly, or as scheduled in the protocol. The
Team will also need periodic departmental reports (for example, accounts may alert you as to any
problems they might be having segregating the income from the Flexi-loan) noting any issues arising
from the new product in the different areas within the institution.
Because your Team has representation from all areas of your MFI, each Team member should come
prepared to provide product-related information about their area at each Team meeting.
At the beginning of a Test, short reporting periods may be appropriate so that the Team can act
immediately to counter any problems that arise on introduction of the product. Thus, for the first two to
four weeks of Test implementation, the Team should meet weekly, with weekly reports. ()
Just collecting data is not enough. You must analyse it. Very regular meetings with the group allow
you to analyse and make decisions quickly. Over the course of the test, meetings will not have to be
quite as frequent as they will be in the beginning.
After that, assuming the Test has settled into a routine, fortnightly or monthly reviews and meetings are
appropriate. These reviews should be based on month-end data.
If the duration of the Test is longer than six months, quarterly evaluations are also appropriate.
The nature of the product and the institution and the market will help dictate frequency of meetings.
Meet often enough to be able to respond to any issues. Don’t meet so often that you find yourselves
simply repeating yourselves from the prior meeting!
Quarterly evaluations allow for a much greater degree of trend analysis. Trend analysis is helpful for
making broader conclusions about the product. Thus, quarterly evaluations offer a point at which the
projections may be re-written and significant decisions made about the progress of the test.
Q: Then what?
Then, the information must be analysed carefully to determine if the product or its provision requires
adjustment. In the case of serious problems, the Test may have to be suspended or discontinued.
While the following will need to be adapted for each product and institution, you will see that preparing
the Pilot Review Protocol will be an important – and extensive job.
The activities to be undertaken will be laid out in an annex – usually a matrix which reviews the prior
visit recommendations, and the current status. For example, if in the prior (or first) review, it is noted
that the pilot site needs an IT specialist to assist with the computerisation. Then in the next site visit the
team will record (in the next column in the matrix) what the pilot site did to identify, interview, hire
consultant or full time IT specialists.
The frequency/timing of review visits will be laid out – how often and for how long will review visits
occur? Review visits to the pilot site will likely be at least monthly, and may last one or several days. It
should be remembered that in centralised MFIs, there will be “review visits” at the head office (where
the Pilot Testing Team is likely located as well), perhaps covering accounting, MIS and other back
office issues.
Recommendations will come out of each visit. Some of these recommendations must be acted upon
immediately (Level 1), or must be addressed at the time of roll out (Level 2), or may be addressed at a
(slightly) later date to improve the product and its potential for success (Level 3).
All of the learning should be documented into reports – typically the following three:
1. Status Report – reports on the previous recommendations. This is done during the site
visit
2. Preliminary Report – A matrix style report which details the relevant recommendations
and the parties responsible for instituting them. This is done during the site visit as well
so that the recommendations can be acted upon quickly and effectively
3. A brief, but formal, written report. Written very shortly following the review visit, it
should include the information in the prior reports, but should also summarise and
discuss the information further.
Exercise
Time: depending on timing of the course, this could be from 45 minutes to an hour or more. This is the
last exercise, however, the group(s) will have realised that there is a lot of “synchronising” to be done in
Steps 1 – 8! Therefore, you may choose to keep this exercise to 45 minutes (ensuring that the group
understands the Review Protocol), and (after finishing the next short section) allow the group to spend
the remaining course time on the earlier steps.
Review Handout 12.1 Monitoring Different Objectives and the Handout 13.1 AfriCo Pilot Review
Protocol and associated Appendices (Handouts 13.2-13.6) – either as a group with the trainer leading
the discussion, or allow the breakout groups to review.
Ask for questions and comments (though fairly brief) – explain, and/or ask others in the class to offer
their understanding. They should understand the importance/thoroughness of the visit - just consider that
there are 21 specific activities to be conducted at the pilot site branch and another 12 at head office.
Provide ample time to the group(s) to at least begin creating their own Review Visit Protocols. They
should not copy the existing annexes verbatim, but should use it as a guide.
3. Recommendation
Time: 20 Minutes
Slides: 7
Q: We have collected all the data and have discussed it. What are
the criteria for our recommendation about Test continuation
and roll-out?
Once you have considered all the implications of the new product for the MFI as well as for the
customers, you must decide whether or not to recommend going forward with the product launch.
After evaluating the Test results and the impact of the adjustments you have made during the Test, it is
time to make a recommendation to the Managing Director (or the Board in the case of smaller MFIs).
Your Team must decide if this product will satisfy the fundamental need of the institution – profits.
Based on the analysis the Team has three general options:
• To recommend expansion of the product to other market areas. This should be done
with revised financial projections and a roll-out plan, both directly reflective of the
results of the Test.
• To recommend a continuation of the Test. This should be done if significant
adjustments were introduced late in the Test (to correct for problems with the product or
its administration), and results of the adjustments are not yet conclusive.
• To recommend termination of the product. This should be accompanied by a report
evaluating the Test and the reasons for the termination recommendation. The Test is run
so that the MFI can determine if the proposed product will satisfy its objectives. Even if
the product is terminated, the institution will have saved itself from a likely large-scale
problem. Do not fear a recommendation of product termination when it is warranted.
When the Team has decided on one of the three recommendations, a formal letter must be drafted to the
Managing Director or the Board of Directors of your institution.
With this report and the documents attached, management will be able to make an informed decision
about the product. Also, the department that “receives” the product will be fully informed about its
history and status, have a plan for roll-out (which they should have had a hand in developing), and
receive all the documents related to the product.
For at least the first two new roll-out To ensure a smooth transition of the product
branches, the Team, with the recipient after the handover, the Pilot Test Team should
department, should prepare branch objective continue to work with the department to which
the product is transferred (most frequently the Credit Department with respect to loan products and the
Operations Department with respect to savings products). The Team should continue to track and analyse
the results from the Test branch for at least another six months, or as determined by the Team, based on
the consistency of results.
The general objectives should be the same as for the Test Branch, with any additional objectives as
additions and not replacements. The specific targets will be unique for each branch. These new targets
should be tracked and analysed for at least six months to ensure that any roll-out issues are identified
quickly and addressed.
The Team should also prepare projections for the product and its roll-out throughout the system in order
to gain an understanding of the overall profitability of the loan product for the institution. These
projections will be based on the actual data gathered at the roll-out branches.
See MicroSave’s “Product Roll-out: A Toolkit for MFI’s Expanding a Tested Product throughout Its
Market” for further guidance on a systematic approach to the roll-out process.
Rolling-out new products and taking them to scale after the completion of a pilot-test is a difficult and
complex process. This MicroSave toolkit covers the steps necessary for an MFI to roll-out a new product
in a controlled and user-friendly manner with tips, check-lists and ideas for optimising rollout process.
Selected Bibliography
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