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    Market Expansion Via Product Diversification: Training On Expansion Strategies September 13, 2011 RBAP BLDG, Intramuros

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    Udayan Datta
    The document discusses strategies for expanding a microfinance institution's market through product diversification. It identifies several options for introducing new loan products, targeting new customer segments or geographic markets. Specific strategies proposed include modifying existing products, developing new products, penetrating existing markets, geographically expanding, and diversifying. The document then discusses regulations that provide opportunities to diversify microfinance products, such as microinsurance, housing loans, agriculture loans, and microsavings. It provides examples of new loan products a microfinance institution could introduce, including home improvement loans, farm loans, and micro agribusiness loans.

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    Market Expansion Via Product Diversification: Training On Expansion Strategies September 13, 2011 RBAP BLDG, Intramuros

    Uploaded by

    Udayan Datta
    20 views13 pages
    The document discusses strategies for expanding a microfinance institution's market through product diversification. It identifies several options for introducing new loan products, targeting new customer segments or geographic markets. Specific strategies proposed include modifying existing products, developing new products, penetrating existing markets, geographically expanding, and diversifying. The document then discusses regulations that provide opportunities to diversify microfinance products, such as microinsurance, housing loans, agriculture loans, and microsavings. It provides examples of new loan products a microfinance institution could introduce, including home improvement loans, farm loans, and micro agribusiness loans.

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    The document discusses strategies for expanding a microfinance institution's market through product diversification. It identifies several options for introducing new loan products, targeting new customer segments or geographic markets. Specific strategies proposed include modifying existing products, developing new products, penetrating existing markets, geographically expanding, and diversifying. The document then discusses regulations that provide opportunities to diversify microfinance products, such as microinsurance, housing loans, agriculture loans, and microsavings. It provides examples of new loan products a microfinance institution could introduce, including home improvement loans, farm loans, and micro agribusiness loans.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    20 views13 pages

    Market Expansion Via Product Diversification: Training On Expansion Strategies September 13, 2011 RBAP BLDG, Intramuros

    Uploaded by

    Udayan Datta
    The document discusses strategies for expanding a microfinance institution's market through product diversification. It identifies several options for introducing new loan products, targeting new customer segments or geographic markets. Specific strategies proposed include modifying existing products, developing new products, penetrating existing markets, geographically expanding, and diversifying. The document then discusses regulations that provide opportunities to diversify microfinance products, such as microinsurance, housing loans, agriculture loans, and microsavings. It provides examples of new loan products a microfinance institution could introduce, including home improvement loans, farm loans, and micro agribusiness loans.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 13

    Market Expansion via Product Diversification

    Training on Expansion Strategies September 13, 2011 RBAP Bldg, Intramuros

    STRATEGIZING OPTIONS! OPTIONS!

    What Should We Do?


    Introduce new loan products to existing clients?

    Introduce new loan products to new markets segments?


    Exploit new distribution channels? Expand branch network to new region? Move upmarket to target bigger customers? Form strategic alliance with other institutions & cos.?

    Growth Objectives

    MF Growth Strategy 2011 2014

    1. Whats my strategic growth objective?


    2. How do I assess competing opportunities?

    9 Ways to Build Demand: Mix and Match PRODUCTS


    Existing Existing Modified
    Modify current products and sell more of them to our existing customers (Product Modification) Offer and sell modified products to new geographical markets Offer and sell modified products to new types of customers

    New
    Design new products that will appeal to existing customers (New Product Dev.)

    M A R Geographical K E New T

    Sell more of existing products to our existing types of customers (Market Penetration) Enter and sell our products in other geographic areas (Geographic expansion) Sell our existing products to new types of customers (Segment Invasion)

    Design new products for prospects in new geographic areas Design new products to sell to new customers (Diversification)

    4
    Source: Philip Kotler, International Marketing Guru & Professor, Kellog School of Mgmt, Northwestern University, Illinois

    Why Should We Do It?


    Why This Technology? Why This Channel? (Ex.: ATM; MP Banking; MBOs) Increase efficiency? Improve distribution? Improve cost-effectiveness? Expand markets? Reach more unbanked areas? Improve income?
    Think Throug h Analys is

    Why This Product Innovation? (Ex.: New microloan prods; savings prods; microinsurance)

    Respond to client needs? Increase Client Retention? Remain competitive? Fill market gap? Expand markets? Improve Income?

    Regulations provide opportunities to diversify MF products

    Microinsurance

    More micro loan products housing, agri

    Micro savings products

    microfinance principles and methodologies


    - small loan amounts -alternative forms of collateral -character & cash flowbased - regular amortization - short-to longer-term (for housing)

    Home Improvements Home Construction House/Lot Acquisition


    Small Farm Production Farm tools & equipment

    */CGAP

    ME loan product
    Small loan size up to P150K

    HMF
    Larger loan size up to P300K

    Micro Agri Loan


    Small loans up to P150k

    Short term: Not more than 12 months

    Longer Repayment Term: up to 3 to 5 years

    Short term: up to 12 months

    BSP recognizes loans for housing to low income groups as microfinance but with loan amount and term that may extend beyond P150k and 12 months, respectively.

    LOAN SIZE
    HOME IMPROVEMENT: Not more than P150K BUY OR BUILD NEW HOME: Up to PhP300k

    TERM
    UP TO 3-5 years

    UP TO 15 YEARS

    BSP guideline allows up to 15 years to pay a loan for new housing or purchase of lot Bank can set lower maximum term.

    Progressive Housing Outputs


    OUTPUTS
    Improved Asset, Shelter & Home-based Enterprise Stronger Community & Economy

    Better Credit History

    11

    MABS APPROACH TO AGRI MICROFINANCE


    Market segment - Farming households with multiple sources of income* Regular loan payments (option: regular with balloon payment) - not totally dependent on success or failure of farm production* Cashflow - determines amount a farmer can borrow & pay* Value chain finance pursue opportunities to reach farmers who are linked to markets, technology, training which reduce farmers risks*

    Where to classify the Micro Agri loan Product? In January 2006, The BSP Monetary Board approved the classification of the Micro Agri loan Product as microfinance. Why is this important?
    No need for Financial statement No need for TIN

    Examples of Agricultural Products Financed Under MAP

    RICE

    ABACA

    VEGETABLE

    COPRA

    POULTRY

    MARINE PRODUCTS

    FRUITS

    FARM ANIMAL

    SMALL FARM TOOLS and EQUIPMENT

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