The document discusses the role of microfinance in supporting rural marketing strategies, emphasizing that microfinance institutions are crucial for alleviating poverty and fostering economic development in rural areas. It highlights the need for innovative marketing approaches tailored to rural contexts, including product availability, affordability, acceptability, and awareness, as well as the importance of consumer education and trust-based borrower relationships. Furthermore, it explores the collaboration between multinational corporations and NGOs in extending microfinance initiatives and improving rural distribution networks to reach impoverished populations.

1. Rural Village Marketing
and Microfinance:
Global Strategies in
Emerging Markets
Jane Ives, Bentley Collage
Frank Cutitta, Global Branding Institute
Martin Sours, Thunderbird
Chris Fussner, TransTechnology Corp.
CGB
The Center for Global Branding BENTLEY COLLEGE

2. Orthodox View
Rich Get Richer
Need Equity to Get a Loan
Large-Scale Multinational Banks
Do the Lending
Rural Poor Are Bad Credit Risks

3. From Microcredit to Microfinance
Microfinance Institutions (MFI)
Are the Key
Income, Credit, Investment Cycle
Breaks Poverty
Reduces the Need for High-Cost,
Traditional Credit
Creates the Smoothing of
Consumption of Nutrition and
Education Goods and Services

4. The Concept of “Social Energy”
Fosters Positive and Rational
Risk-Taking
Allows Leaders to Arise at the
Local Level
Creates a Dynamic of the Diffusion
of Ideas and Optimism throughout
the Society

5. Innovation
Topical Term in Today’s Microfinance
Activities
Represents the Groundwork of
Financial Institutional-Building
Represents an Understanding of the
Livelihood of Target Clients
Captures the Nuanced Context of the
Local Setting
Leads to Voluntary Savings Products
Provided by the Association for Social
Advancement (ASA)

6. Providing Choice: A Key
Microfinance Activity
Offers Both Liquid and Illiquid
Microfinance Products
Life Insurance
Contractual Savings Products
Flexible Opportunity for Village/Rural
Poor to Both Save and Borrow

7. Multiple Microfinance Forms:
Traditional, Informal, and Modern
Moneylenders; The Traditional,
Regressive, Potentially Exploitative
Method of Borrowing
Informal Groups, esp. Housewives
Groups
Modern Forms—NGOs, Grameen Bank
Key Elements
Based on Trust, not Law nor Contract
Borrower Must Join a Group
High Priority Given to Social Capital

8. Grameen Bank and
Women’s Empowerment
Grameen Bank, Established in 1983,
Targeted Bangladesh’s Very Poor
Loans of $12–15 Bought a Sewing
Machine, Goats, Ducks, etc.
Women Have Better Repayment
Rate(s) than Men
Break the Cycle of Moneylenders
Who Offered Long-Term Loans

9. Key Islamic Issues
Daden Financing of Crop Rotation
(Forward Sales of Crops which
Substitute for Interest)
Profit Sharing among the Group
Also Replaces Interest
Loans Based upon Land Worked
Trade Credit Based on Product
Worked, Like Jewelry

10. Rural Marketing
“Rural” Is, Above All, a Mindset
Rural Is Agricultural Dependent
Rural Distribution Is Essential but
Difficult and Uses Small-Scale
Transport
Affordability Means Small Unit Size
to be Marketed/Sold
Products Must Compete with Long-
Standing, Natural Products For
Cleaning, etc.

11. Rural Marketing: The Four “A’s”
Availability of Product and/or
Service; Attention Must be Paid to
Distribution Channels
Affordability; Product Has to be
Priced Realistically
Acceptability; The Product Has to be
Relevant and Desirable
Awareness; Brand Management Is
the Key Here

12. Rural Marketing
Building with BRICs
The BRIC’s markets (Brazil,
Russia, India, and China)
markets will be the world’s
largest economies over the
next 40 years.
However, the bulk of their
populations live outside the
urban centers.
700 million people in both
India and China live in what
is described as rural
villages…roughly two-thirds
of their populations!

13. Rural Marketing
Need for Distribution Networks
MNCs are spearheading
microfinance programs which
extend rural distribution.
P&G, HP, and Unilever have
sophisticated corporate
programs encouraging
entrepreneurship among
impoverished.
Hindustan Lever’s Projects
Streamline, Shakti, and Bharat
are considered showcases of
corporate responsibility.
All new Unilever employees
spend 6–8 weeks living in rural
villages where inhabitants earn
about $2 per week.

14. Strange Bedfellows
Unilever teams with Oxfam
to measure hotly debated
MNC links in reducing
poverty in Indonesia.
Results inconclusive but
broke new ground on MNC
and NGO joint initiatives.
Did find that some 300,000
jobs created as a result of
Unilever’s external
distribution value chain.

15. Rural Marketing
Consumer Education
Rural villagers need to know
a products benefit(s) before
the brand can be sold.
Live demonstrations are
critical.
Van tours to the “hattas”
(perodic markets) for a
“dekko” (Hindi for a “see” or
“demo”).
Women’s self-help groups
(SHGs) are a critical
component of microfinance,
entrepreneurship, and
consumer education.

16. Rural Marketing
Education
Rural marketer must be
both educator and
student.
Some products may be
used in rural settings
differently than urban
or suburban areas.
Example: Same soap
may be used for
laundry, dishes, and
body.
Buy three different
products, or find one
that works well with
all?

17. Rural Marketing
Packaging
Lack of storage space,
appliances, and basic
utilities.
Shelf stable but attractive.
Must be easily deliverable
on unusual modes of
transport (bicycle).
Pouch packs and sachets
popular.

18. Rural Marketing
Pricing
Agrarian economy provides
inconsistent personal cash
flow—buy after the crops
are harvested.
Despite extremely low
income, little-to-no housing
or utility costs provide
disposable income.
Price:performance ratio is
much more important than
just cheap goods.

19. Rural Marketing
Marketing Technology Infrastructure
Blend of ancient tribal custom
and latest technology.
Trailblazing E-Choupal
Network links 1,000 villages
where it touches 3.5 million
farmers.
n-Logue’s village hubs and
kiosk.
Mobile phones are microcredit
start-up staple.

20. Rural Marketing
Marketing Technology Infrastructure
Internet connections increase
marketing communications
options through village
center.
Online product dekkos and
Web-based competitions via
streaming video.
Printers provide ability to
produce pass-along collateral.
Databases of village “CMO”
e-mails for ongoing
communication.

21. Rural Marketing
Creative and Messaging
Transliteration of urban
messages very risky given
diversity of rural languages
and cultures.
Literacy limits amount of
copy.
Village choupal (gathering
place) is still prime delivery
venue.
Wall paintings, transport ads,
and banners are very popular.
“Star power” works but is not
universal across villages.

22. Rural Marketing
Buzz and Word of Mouth
Buzz and word-of-mouth
marketing are already built
into tribal culture.
Heavy reliance on young
villagers working or
studying in neighboring
villages/cities for “what’s
cool” in outside world.

23. Bangladesh Specifics
1970s—Young activists want to
rebuild the country with village-
based groups
1980s—“Target Groups” approach,
minimizing paperwork and
decentralizing decision-making
Early 1990s—Greater emphasis on
individual borrower accountability
Today—Diversified financial services

24. Sri Lanka
Sarvodaya Economic Enterprise
Development Services (SEEDS)
Founded in 1958, incorporated in 1972
Based on a vision of a new social order
Sri Lanka’s largest NGO with global
linkages
Provides training, introduces new
technologies, and links producers and
end-clients

25. Philippines
A vision of a viable, private, accessible
microfinance market
Create a greater role for the private
sector
Establish a market-oriented financial
credit policy environment
Capacity-building in local deposit
mobilization, project management,
and use of information technology

26. Energy: A New Frontier
Links between energy and
microfinance need to be strengthened
Microfinance clients need access to
reliable energy services
Success can involve multiple clients;
energy providers, poverty reduction,
and economic development donors
Costs of energy must match
consumers’ income flows

27. In Sum
Microfinance: A key element in
fostering an ethical, market-driven
economy
Key institutions are in play
• Microfinance Institute
• ACCION in Latin America
• Citigroup Microfinance Group
• Grameen Foundation and Bank
• The Kearny Alliance
• World Council of Credit Unions