Tag Archives: market research

Scouting New Territory II

The other day I talked about how an MFI figures out the potential market for their services in an area.  A simple calculation using statistics provided by the government offers a high-level estimate of the number of women in the target profile.  But it is also important to understand the situation on the ground – who is there already and what are they doing?  On a recent market research trip with some NWTF staff, I learned how to get the answers to those questions.  The team included the director of the research department, a research officer, the regional manager of the NWTF branches in Cebu, and four prospective loan officers from Kalibo (henceforth referred to as “the girls”). To get the answers to these questions, we employed two strategies – individual interviews and focus groups – and split up.

The director and the girls look for women to interview.

The girls were responsible for walking around the villages we’d visit and interviewing women about their businesses.  Using a PPI form to screen for women below the poverty line and a questionnaire, the girls gathered statistics that later would be aggregated and analyzed back at the office.  The questionnaire asks their household income, whether it is regular or seasonal/contractual, whether or not they own a business.  The girls ask the interviewees to estimate the amount of capital needed for their business, and, if given a loan, what they would purchase (with a corresponding cost estimate).  Lastly, they ask what they would do with 5,000 pesos – the minimum loan for a first-time client – how much amortization they can afford, and what mode of payment would be suitable (daily, weekly, monthly, etc.). Continue reading

Scouting New Territory I

The van.

One misconception about microfinance institutions is that, because they are NGOs with a core social mission, they do not compete in the same way as traditional for-profit companies.  This is, of course, not the case.  Just like any other business, MFIs must strive to offer the best product, best service, and, ideally, serve communities with a sizable demand for microfinance.  This gives you a competitive edge over other MFIs in the area.  When considering expansion, an MFI needs to consider the conditions of the region and understand the economic profile of the people in the community. I just got back from spending four days on another island, tagging along on a market research trip to evaluate and assess the potential for expansion in the province.  First, how big is the market? Continue reading