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Lessons from MicroSave’s Action Research Programme (2003)

Posted on by MSC

This report summarizes lessons learned from MicroSave‘s Action research Program. The key lessons learned are:

  • Unplanned explosive growth in response to customers’ needs can be fatal to the organization. Rapid induction of new staff can undermine internal control. Cramped office space would undermine productivity;
  • The rapid expansion that is characteristic of market-led growth is often difficult to finance because each new branch would require funds to hire staff, expand the loan portfolio, etc. and that could be difficult;
  • Preparing for market-led growth by ensuring that policies, procedures and management systems are in place, is very essential;
  • In responding to challenges, prioritizing, sequencing and communicating change is of great importance;
  • Information systems, procedures and templates can partially automate the management of growth. Networked information systems can facilitate more transactions, installation of automated teller machines (ATMs) would decrease costs and make the service more accessible;
  • Successfully pilot-tested financial services can be quickly rolled out using a standardized approach;
  • Continuous improvement of processes and systems is essential to deliver market-led financial services and control risks surrounding growth;
  • Proper internal and external communication is very important. Poor communication could result in misunderstandings between the management and staff, and between the institution and its customers;
  • ‘Word of mouth’ marketing is very effective. Financial services have to be carefully communicated to the intended customers and feedback about the product should be taken from them;
  • Good customer service is essential.

Market Orientation As The Key To Deep Outreach

Posted on by Parul Tandon

This note lays emphasis on market orientation among MFIs to scale up their operations. It argues that MFIs lack market orientation, which often results in client dropout (and also because of MFIs possessing product orientation). It further explores three stages in research on market orientation conducted by various academics. The first stage sought to define market orientation and consists of an organisational culture and a set of functional activities aimed principally at creating customer values. The second stage of research focuses on identifying determinants of market orientation. The third stage sought to consolidate and generalise extant learning and to test empirically the actual antecedents of market orientation and the relationship between market orientation and institutional performance. The notes lists out five rules of thumb can help guide the transition to market orientation for MFIs.

Passing the Buck in East Africa – Money Transfer Systems: The Practice and Potential for Products in Kenya

Posted on by MSC

This study provides contextual information on the Kenyan economy and financial sector as a backdrop to a review of the available money transfer services. It looks at the supply side of money transfer services that include the service providers, transaction values, frequencies and fees. It further looks at the demand side of money transfers—clients, their purposes and the relative costs and risks involved. The study concludes with an outlook on potential market opportunities for microfinance services and summarizes criteria for product design.

Competition Working for Customers: The Evolution of the Uganda MicroFinance Sector A Longitudinal Study from December 2001 to March 2003

Posted on by MSC

This paper is part of a wider study “The Competitive Environment in Uganda – Implications for Microfinance Institutions and their Clients” sponsored by MicroSave and DFID’s FSDU (Financial Sector Deepening Uganda) programme. The paper highlights the major changes in products viz. loan and savings, corporate brand and service delivery strategies used by MFIs. It documents the evolution of the microfinance industry and explores possible strategies for maintaining a competitive edge. The paper also gives an overview and highlights the key changes in the competitive market on the basis of the 8Ps of marketing, which include product, price, place, promotion, positioning, people, physical evidence, and process.

An In-Depth Quantitative Assessment of the Ugandan Microfinance Environment

Posted on by MSC

This document is a part of a quantitative market and competitor environment research based assessment in Uganda. It presents the research objectives, methodology employed and full research findings gathered through the interview process in Jinja, Mukono, Masaka and Kampala. The key findings include socio economic characteristics of the clients, product usage, clients’ preferences and awareness levels about service providers, and methodology employed by the institutions providing financial services.