Attracting the Unbanked: Preliminary Guidelines for Maximizing Existing Infrastructure through Serving Untapped Markets

This paper presents guidelines that can be used by a MFI to develop the unbanked market and increase outreach. It offers step-by-step guidance to an MFI that seeks to increase the number of clients served per branch by marketing to the unbanked.The paper is divided into the following five sections:

• Section 1 addresses the:
  • Objective of the guidelines: to help MFIs identify and reach out to the unbanked population through the Banking the Unbanked project;
  • Conceptual framework and the research methods used in the development of the guidelines.
• Section 2 outlines the following five components of the guidelines:
  • Institutional preparation;
  • Customer market segmentation;
  • Competitive advantage analysis;
  • Target segment selection;
  • Outreach strategy development and implementation.
• Section 3 discusses each step, focusing on how to gather and analyze the key data for each task;
• Section 4 illustrates each step with findings from Inicjatywa Mikro (IM), a Polish MFI that partnered with the Microfinance Centre (MFC) to test the guidelines;
• Section 5 illustrates how IM generated the information generated to tap into new markets about which it was unaware, and that were unbanked.

The paper concludes that MFIs can reach the large number of unbanked in the financial markets in developing countries through the strategy of market segmentation, and thus build their market share while maximizing the use of the existing infrastructure.