RURAL MARKETING STRATEGIES OF MICRO FINANCE INSTITUTIONS- A VIEW By.
Mrs.A.Pankajam, Associate Professor, Avinashilingam School of Management Technology, Avinashilingam Deemed University for Women, Coimbatore-43 ABSTRACT
Rural India was once considered a mere painter’s muse and not a uberous ground for business. The reason being – around 42% Indians are below poverty line earning around $1.25 a day. Addressing poverty-based issues, NGOs, Microfinance Institutions (MFIs) and social entrepreneurial organisations have emerged in a big way to provide sustainable solutions to the poor through scalable business models and also created market opportunities for business transforming the rural markets’ landscape substantially. In the 21st century, rural India has evolved in a big way. The growing literacy rates, rising income levels, increasing purchasing power and consumption levels of people have grabbed the attention of corporates, who have erstwhile wooed urban consumers to buy their products. As of 2009, rural regions are flocked by big companies like Coca-Cola, Nokia, HUL, LG, Bharti Airtel, ITC, Bajaj Allianz and Godrej. Over the years, these companies also realised the need to develop rural regions as a key for their growth as well as the nation's economic development. In the process of charting out ways for market-based development, they partnered with MFIs to expand their network. These MFIs, acting as distributors to the companies, are benefitting them by enhancing their brand visibility in rural areas, helping them in tapping more rural consumers, save distribution costs, etc. Micro Finance Institutions (MFIs) now have access to staggering 50 million clients with powerful social network. Their understanding of group dynamics, bonding and proximity to customer is unparalleled. The extensive reach and power of SHGs are now being leveraged by companies to penetrate this market. And that is precisely why several consumer product companies are exploring this emerging retail channel that is promising to take them into the heart of India's vast rural hinterland. The success stories of companies which they worked together with MFI paved a way to develop new channel to pry open the BOP. MFIs are helping various industries like FMCG, Consumer Goods, Financial service, Insurance to reach the untouched places of India. The situation in the not-too-distant future when MFIs may mutate into divisions or wings of large corporations. This paper attempts to expose the rural marketing strategies like Creating a consumer capacity of MFIs. Key Words: Rural India, Microfinance Institutions (MFIs), rural retailing, E-Chaupal
The term “marketing” is usually associated with advertising, promotional, and public relation activities aimed at selling a product, service, or concept. In fact, marketing is a program encompassing a range of activities, such as demand and consumer analysis, market segmentation, competitive analysis, positioning strategy, and promotion. Broadly speaking, marketing for a microfinance institution (MFI) can be defined as an analytical tool to study and know the client. It addresses the questions of who are the institution’s clients, how many clients there are, which clients should the MFI target (target market), and how many clients it hopes to capture (market share). The concept of a marketing program has emerged as an important issue for MFIs only in the past few years because of four factors: 1. Increasing competition in some markets for microfinance;
2. Slowing growth rates in certain MFIs;
3. Increasing client desertion; and
4. Growing recognition that MFIs need to be more client led. Until now, most MFIs have operated in a relatively noncompetitive environment, where the market for financial services to microenterprises and low-income households contains only a few players, each having its own specific target clientele, and where the level of unmet demand remains high. The priorities for these...
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