Do Microfinance Institutions Really Need to Worry About Their Brand?

This paper documents some of the experiences of MicroSave's Action Research Partners (ARPs) in strategically building a corporate brand of MFIs to reach more clients, increase profitability and become more market-led.The paper provides supporting arguments for emphasizing the importance of brands for MFIs:

• Facing competition: In markets with intense competition, strong brand will distinguish an institution;
• Maintaining market leadership: In markets with very little competition an MFI will want to maintain its leadership and recognition;
• Mobilizing savings: To mobilize savings effectively, a brand is needed to communicate the safety, security and/or accessibility of deposits to the clients;
• Unifying stakeholders around a common vision: Strong brands help unify institutional stakeholders around what the institution believes in and what it stands for;
• Enhancing marketing effectiveness: It is important for an institution to have a clear brand for marketing purposes;
• Increasing profitability: Building a brand that people want to be affiliated with can increase profitability
• Building credibility: Established, trusted brands develop strength in the marketplace enabling them to weather negative publicity and downturns.

The paper provides insights on the brand building process. It details the following:

• Determining when to focus on the brand;
• Tools to develop a brand;
• Elements present in most successful brands;
• Presentation of brand internally and externally;
• Setting up of policies, procedures and processes to deliver on a brand;
• Monitoring and measuring the success of the brand.

Finally, the report concludes with the following:

• Branding has received narrow and limited attention from the microfinance industry;
• Brands are much more than logos, taglines and marketing messages;
• Customers can be enticed by external expressions of a brand;
• A brand should not be a secret - it should be loud and clear.