The microfinance industry is developing rapidly around the world. With the spread of best practices, an increasing number of microfinance institutions are providing services with a clear orientation toward sustainability and profitability. As these institutions mature, their clients also mature, which has resulted in the pressure of increasingly sophisticated client demand. Increased competition also places pressure on microfinance institutions (MFIs) in many countries. This pressure provides MFIs with a strong incentive to retain their existing clientele and to identify new clientele in order to expand. MFIs often need to refine the financial products they offer to promote expansion. The combination of all these factors has increased the importance of marketing within microfinance institutions.
Marketing, seen as the holistic relation of an institution with the various markets it serves or would like to serve, has thus far been recognized as important by only a few MFIs. Interestingly, most MFIs initially focus on promotional activities, but few address all fundamental aspects of a marketing program. This study guide, which was written by Bankakademie in Germany and first published by GTZ with the title "Marketing for Microfinance Depositories", details the aspects of a comprehensive marketing program necessary for MFIs to become fully client-oriented. It provides practical examples of how to increase the level of sophistication of marketing programmes within microfinance institutions and cites examples from MFIs currently operating in Africa, Asia, the Caribbean and Latin America.
The lessons are accompanied by a case study, which follows a fictitious institution called MICROBANK through the development of a marketing plan for some new savings products. This case study illustrates how theoretical information can be applied in a practical situation. Throughout the case study, the reader is invited to answer questions and complete some practical exercises to increase his or her understanding. While these exercises can be done on an individual basis, marketing know-how is best acquired through discussion with fellow practitioners and this is strongly recommended to users of this material. Model answers for many of the questions are provided using the MICROBANK example but it must be remembered that marketing is not an exact science and different viewpoints can provide differing but nevertheless, successful solutions to the same problem.
The video “Little Money, Big Vision”, which can be watched here in the RFLC, is designed to accompany this guide.