Traditional market analysis may be useful in creating a marketing strategy for an microfinance institution, but some tweaks are necessary. USAID states that marketing for microfinance institutions must be built around market type, first and foremost. Instead of judging a market on purchasing power and decision-making factors, as a traditional for-profit business might, an microfinance institution needs to consider the level of development of its target community. It is likely that competition with other established lenders is not as critical as meeting the immediate capital demand of the population at hand.
Basic adaptations of banking products, such as distributing user-friendly technology, may serve as marketing tools themselves. Those accustomed to using first-world marketing plans must expand options creatively and on a region-specific basis.
According to MicroSave, a market-led approach to microfinance institution marketing is best supplemented by the following:
Pre- and post- product testing
This step is essential for analysing the effectiveness of the financial products offered.
Service delivery process mapping
Streamlined delivery of financing requires communication between field branches and corporate donors.
Assessment of donor and stakeholder needs
Cost-effectiveness and financial stability should be factored into long-term marketing.
Risk analysis of IT products
Technology should facilitate quick funding and loan usage tracking.
An microfinance institution trying to break into a new market should not underestimate the impact of word-of-mouth, especially if it is a result of individuals’ trusting relationships with a foreign entity. Initial contact with the first loan recipients in a new geographical area is of utmost importance. Fostering trust in the form of follow-up is as good a marketing approach as any expensive campaign, in the unique types of markets served by microfinance institutions.
In the microfinance industry, marketing may not mean what it does in a corporate environment. Successful marketing for MFIs depends on less technical, but more personal, factors. An organization that can master this flexibility can experience rapid and sustained growth in the ever-changing field of microlending.