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9.30.09 Micro Save Presentation

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  • 1. MicroSave Market-led solutions for financial services Market- Market Research for Youth Financial Services Corrinne Ngurukie Global Youth Enterprise Conference – Washington, DC September 30th 2009
  • 2. MicroSave Market-led Solutions for Financial Services After nine years as a donor project, MicroSave in Africa now provides services on a consulting basis to over forty clients across ten African countries. In our work we are driven by a commitment to promote market responsive financial institutions. In doing so we serve millions of Africans. We continue to grow to serve, and we serve so that we might grow
  • 3. Why Conduct Market Research? • Careful analyses have shown that: • Reasons for “drop outs” almost invariably points to inappropriately designed products that fail to meet the needs of the MFIs’ clients • Simply replicating products and systems into very different socio-economic conditions will not work. • Poor people need access to a variety of financial services to reduce their vulnerability
  • 4. Diverse Services Driven By Diverse Needs Household Formation Death (C, I) Birth (C,S,I) Ongoing Financial Needs Working Capital (C,S) Productive Assets (C,S) Investments (S,C) Asset protection (I) Health (C,S,I) Shocks (C,S,I) Old Age (I,S) Education (C,S) Marriage Ceremony (C,S) Source: Monique Cohen
  • 5. Market Research & Product Development Process Overview Costing & Qualitative Qualitative Pricing Research Research Research: Issue Plan FGD/PRA Understanding clients’ needs Concept Development Quantitative Product Refine the Research: Ready for Concept into Prototype Pilot-test a Prototype Risk Testing Analysis & Process Testing the Product Prototype Mapping
  • 6. Why Follow A Process ? • Investing small amounts up front can save large amounts and/or generate larger amounts of business in the future • One step of the process leads to and informs the next … and provides a disaster /reality check “Finally, [the MFI] recognizes the seasons – there are many months in the year when we do not need credit. Now we don’t have to borrow all the time to stay as members…we can really use the new savings accounts for school fees, as well as when we get sick Clients from Kenyan MFI
  • 7. Market Research for YCS - Approach Key considerations: • Logistical and Mobilization activities • Use of highly participatory qualitative market research tools • Focus group discussions (6-8 respondents) – segregate by • Gender • Age-group • Socio-economic status • Environment – rural vs urban • Engage other key stakeholders (parents, community leaders)
  • 8. Market Research for YCS - Content Key considerations: • Segmentation of Youth – age, gender, socio-economic status • Understand behavior & attitudes toward financial services • Perceptions and use of money • Lifecycle of a youth - Financial needs and coping mechanisms • Determine value proposition to youth for financial services • Understand the Environment in which youth operate – urban vs rural; Financial landscape • Role of parents/ guardians and community leaders • Potential barriers to usage: access, liquidity, costs, returns
  • 9. Understanding Financial Needs of Youth Life‐Cycle Events Needing Lump‐Sum Amounts of Money
  • 10. Responding to Youth Financial Needs (1) Positioning Product Physical Process Evidence Market-led Product Price Concept Promotion Place People
  • 11. Responding to Youth Financial Needs (2) • Group most common and prevalent and develop products in response to the most common needs • Think in terms of the variables that must be considered when going through this process. For example:- • Time scale/duration/maturity of the product – short, medium or long term • Nature of deposits/repayments – small regular, small irregular or single/few lump-sums • Liquidity – the ease of access to savings/speed of disbursement of loan • Access issues – branch proximity/opening hours and numbers of withdrawals/concurrent loans
  • 12. … A Market-led Approach Market-led Microfinance meets and manages the expectations and needs of both MFIs and their customers.
  • 13. MicroSave Market-led Solutions for Financial Services For More Information David Cracknell – Principal Director, Africa Email: David@MicroSave.org Corrinne W. Ngurukie– Financial Services Consultant Email: Corrinne@microsave.org Website: http://www.MicroSave.org Physical Address: 4th flr, Shelter Afrique Building, Mamlaka Road Nairobi, Kenya

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