Paper
Product Features of Individual Lending – (2/2)
Marketing individual lending products
2 pages
MicroSave's Briefing Note No. 87 the 7 Ps of marketing an individual loan product, namely, price, positioning, process, promotion, people, place, and physical evidence.
The note states that the total cost of Individual Lending (IL) products not only includes interest and fees paid by the client but several other costs such as foregone wages, travel costs, and time. It discusses the importance of an MFI's market positioning and suggests that MFIs must:
- Strive to keep indirect costs to a minimum through efficient processes;
- Make an effort to occupy a distinct competitive position in the customer's mind;
- Prepare a comprehensive procedure manual detailing the 'who, what, when, where, why, and how' of all processes, with adequate internal control provisions to mitigate risks;
- Update these manuals regularly and keep them ready for staff use;
- Initiate staff incentive schemes to mitigate fraud risk.
Finally, MFIs should finalize the product features based on their strategy and competitive positioning in the market, but should always be aware that offering individual loans is very different from delivering group-based loans.
About this Publication
Published
