Tools for Market Research and Product Concept Development

8/12/2019 Tools for Market Research and Product Concept Development

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Market Research for Microfinance in War-affected Areas

Tools for Market ResearchProduct Concept Development

By:

Tamsin Wilson (The Springfield Centre)Straton Habyalimana (Concern Worldwide)

Isabelle Kidney (Concern Worldwide)

January 2004

Concern WorldwideThe Springfield Centre


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TABLE OF CONTENTS

PREFACE ........................................................................................................................................... 1ROADMAP.......................................................................................................................................... 2

INTRODUCTION................................................................................................................................. 3THE PROCESS OF MARKET RESEARCH AND PRODUCT CONCEPT DEVELOPMENT....... 4ASSESSMENT OF THE MACRO- ENVIRONMENT ....................................................................... 5PURPOSE..............................................................................................................................................5RESOURCES REQUIRED.........................................................................................................................5METHODOLOGY.....................................................................................................................................5NOTES ..................................................................................................................................................5FRAMEWORK FORASSESSMENT OF THE MACRO-ENVIRONMENT......................................................... 6

ECONOMIC FACTORS ..........................................................................................................................................6POLITICAL FACTORS ...........................................................................................................................................7LEGAL FACTORS ................................................................................................................................................7INFRASTRUCTURE ..............................................................................................................................................7SOCIAL FACTORS................................................................................................................................................8

ASSESSMENT OF THE LOCAL ENVIRONMENT.......................................................................... 9PURPOSE..............................................................................................................................................9RESOURCES REQUIRED.........................................................................................................................9SAMPLING PROCEDURE.........................................................................................................................9METHODOLOGY.....................................................................................................................................9NOTES ................................................................................................................................................10FRAMEWORK FORASSESSMENT OF THE LOCAL ENVIRONMENT .......................................................... 11

1. WEALTH RANKING: DEFINING POVERTY CHARACTERISTICS ............................................................................112. FOCUS GROUP DISCUSSION: MARKETS ANDTRANSACTIONS.........................................................................123. FOCUS GROUP DISCUSSION: SECURITY, POPULATION MOVEMENT AND HOUSEHOLD RISK EXPOSURE .............134. FOCUS GROUP DISCUSSION: SOCIAL CAPITAL AND GENDER ..........................................................................145. SEMI-STRUCTURED INTERVIEW: HOUSEHOLD FINANCE .................................................................................15

USAGE, ATTITUDE, IMAGE (UAI) QUESTIONNAIRE.................................................................17PURPOSE............................................................................................................................................17RESOURCES REQUIRED.......................................................................................................................17SAMPLING PROCEDURE.......................................................................................................................17METHODOLOGY...................................................................................................................................17NOTES ................................................................................................................................................18USAGE, ATTITUDE, IMAGE QUESTIONNAIRE ON MICROFINANCE SERVICES.........................................19

AWARENESS, KNOWLEDGEAND TRIAL OF SERVICES........................................................................................20USE OF SERVICES ...........................................................................................................................................21COST OF SERVICES .........................................................................................................................................21SUPPLIERS.......................................................................................................................................................22REASONS FOR NON-PURCHASE OF SERVICES .................................................................................................22PERCEIVED VALUEOF SERVICES......................................................................................................................23RESPONDENT CHARACTERISTICS .....................................................................................................................23


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PRODUCT DESIGN WHEEL...........................................................................................................24PURPOSE............................................................................................................................................24RESOURCES REQUIRED.......................................................................................................................24METHODOLOGY...................................................................................................................................24THE PRODUCT DESIGN WHEEL ...........................................................................................................25

PRODUCT CONCEPT AND PRICE SENSITIVITY QUESTIONNAIRE.......................................28PURPOSE............................................................................................................................................28RESOURCES REQUIRED.......................................................................................................................28SAMPLING PROCEDURE.......................................................................................................................28METHODOLOGY...................................................................................................................................28PRODUCT CONCEPTAND PRICE SENSITIVITY QUESTIONNAIRE........................................................... 30

REACTION TO PRODUCT CONCEPT...................................................................................................................31RESPONDENT CHARACTERISTICS .....................................................................................................................33

ROAD FORWARD ........................................................................................................................... 341. ESSENTIAL RESEARCH KNOWLEDGE: SAMPLING.........................................................................34

1.1 PURPOSIVE SAMPLING............................................................................................................................341.2 STRATIFIED RANDOM SAMPLING .............................................................................................................342. ESSENTIAL RESEARCH INFORMATION: METHODS OF DATA COLLECTION.....................................35

2.1 FOCUS GROUP DISCUSSION ...................................................................................................................352.2 INTERVIEWING - SEMI-STRUCTURED INTERVIEW (PERSONAL INTERVIEW)..................................................362.3 THE QUESTIONNAIRE ..............................................................................................................................36

3. NEXT STEPS: PILOT TESTING THE PRODUCT PROTOTYPE........................................................... 374. NEXT STEPS: BUSINESS PLANNING..............................................................................................37


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1

Preface

The Tools for Market Research and Product Concept Development are one of the outputs of an action

research project by Concern Worldwide and the Springfield Centre for Business in Development, funded by

The Enterprise Development and Innovation Fund of the United Kingdoms Department for International

Development. The three-year project, begun in January 2000, comprised two phases. In the first phase of

one year, qualitative field research on the demand-side of microfinance in war-affected contexts was

completed in Angola, Cambodia, Mozambique and Rwanda. In the second phase, the research results

were used to design a new MFI in Rwanda offering innovative microfinance products. The Tools for Market

Research and Product Concept Development were initially devised to guide the development of these new

products in Rwanda.

There has been a history of unsuccessful microfinance interventions in war-affected contexts, characterised

by rapid start up, disbursement of a large volume of loans, high levels of default, limited capacity for loan

recovery and organisational collapse within a few years. The cause is all too often traced back to under-

funded and hurried design and planning, based on inaccurate preconceptions. These Market Research andProduct Concept Development Tools provide a straightforward summary framework for collecting in-depth

and accurate market information in a timely and cost-effective manner. The tools are also not designed for

use immediately after and during armed conflict

The tools are intended for microfinance practitioners who wish to develop from scratch one of the new breed

of microfinance organisations operating in harsh conditions but nonetheless seeking to become profitable in

the long term. They are not for the organisation planning a short-term credit project as part of relief

operations; the cost of the research in terms of time and personnel would be too great.

The adage garbage in, garbage out applies to the process of market research. Without a manager or

advisor that has practical experience of conducting rigorous field research, and who can guide the entire

process, the market research results are likely to be of questionable reliability. Without reliable results, the

ensuing microfinance product(s) will be unlikely to succeed. Therefore, it is vitally important that

organisational capacity for research is analysed prior to using these tools and if necessary external support

sought.

The authors would like to thank the staff of Concern in Rwanda, Haiti and Cambodia for their assistance in

testing these market research and product development tools.


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2

Roadmap

The Roadmap helps to navigate through this manual. The tools are intended to be a series of useful guides

to action, taking users sequentially through the different stages in undertaking market research. The

research begins with a broad analysis of the overall environment and ends with a detailed test of the specific

microfinance product that has been developed over the course of the research.

Tool

1Tool

2Tool

3Tool

4Tool

5

THE MACRO-ENVIRONMENT:Is the political, economic, social andphysical situation conducive to the provision of microfinance?

THE LOCAL ENVIRONMENT:How will factors such as, prevalence oflocal markets, transactions that take place, local security, populationmovement, household risk exposure, social capital, roles of men andwomen, household financial arrangements and local poverty characteristicsinfluence a future MFI?

CURRENT ATTITUDE TOWARD, USE & PERCEPTIONS OFMICROFINANCE:What experience and understanding of microfinance(including informal microfinance) is there? Is microfinance widely used?Who currently provides microfinance services? Are they valued?

PRODUCT DESIGN PROCESS: What kind of microfinance product wouldrespond most directly to the wants and needs of clients? How can weimprove on the products offered by other providers? Is there a need formicrofinance services? Is it conforming with microfinance good practice?

PRODUCT CONCEPT AND PRICE SENSITIVITY TEST: What do

potential clients think of the product concept? Is it a product that fits wellwith their needs? What do they think are the most important characteristicsof the product? What is a reasonable price for the product?

5Go To Page

9

17

24

28

Info ROAD FORWARD:How to carry out interviews? Where to go for furtherresources? What to do once the product concept has been developed andtested?

34

For


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THE MARKET RESEARCH TOOLS

3

Introduction

The Market Research Tools for designing microfinance products in war-affected countries are intended to

increase the success of microfinance interventions in these dynamic and complex environments. In the

past, there has been a tendency to simply replicate microfinance models or to design a completely newmodel without questioning whether it is attractive to the client or likely to support a sustainable Microfinance

Institution (MFI). These five market research tools comprise qualitative and quantitative methods of data

collection, which guide a research team from firstly collecting information on the environment in which they

operate, to secondly, finding out the wants and needs of potential clients, to thirdly bringing this information

together in the microfinance product design process, to finally testing whether or not the proposed product

concept is indeed helpful and attractive to the target group.

Microfinance is an important element of the coping and recovery process for people who have been affected

by war. Deposit making, the gradual accumulation of savings, helps to reduce the vulnerability of people

who through war may have lost the physical and financial assets, social linkages and income earning or food

production opportunities that are normally used to cushion the household from shock. Loans, especially

small ones for the poor can in some cases help them to develop new income earning work. Studies have

shown that borrowers are prepared to pay extremely high rates of interest (e.g. 100% per day) to

moneylenders in the unstable and uncertain period during and immediately after war.

The most important requirement for microfinance in war-affected countries is that there is demand for

financial services. Subsequently, MFIs or NGOs need to think about how they will intervene to help people

access the services they want, in which case a fairly static population (whether in the place of refuge or at

home) and an acceptable level of local security1are the two non-negotiable requirements.

In these conditions, MFIs must however be more skilful in the way that they develop and manage

microfinance services. The market research tools give organisations a head start by ensuring that they have

an excellent understanding of their clients and the environment. This makes good decision-making easier.

The characteristics of the tools that make them useful in war-affected areas are:

They assume little institutional knowledge of the local area as many organisations are prompted by

armed conflict to move into areas that are new to them.

They assume that human resources will have been eroded and therefore, to compensate, utilise a

small range of simple data collecting activities based on verbal communication.

They respect the concept of microfinance markets and encourage organisations not to undermine

already fragile markets.

Looking toward the future, the results of these tools can also be used as a baseline, against which

performance of the MFI can be measured. In order to remain relevant in rapidly changing situations such as

these it will be important for brief market research studies to be carried out at least annually to ensure that

the organisation meets the dynamic needs of the target group and responds to the developing environment.

1There are no firm rules for when a situation is too insecure. Security advisers, project staff and management need to be responsible for

deciding whether or not the environment is safe enough for the kind of work being undertaken in the local area. In rapidly changing

environments formalised, regular reviews of security and procedures, based on primary and secondary information should take place.


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The process of Market Research and Product

Concept development

Successful market research and product concept development depends on a controlled process of

research, from start to finish. The process should be divided into different stages with control gates

positioned prior to each stage (Figure 1). These control gates, are simply an opportunity to step back from

the research and analyse performance to check that the organisation is investing in a product that is going to

be successful. It is helpful to create a committee responsible for assessing (using pre-defined indicators of

achievement) whether or not the previous stage was completed satisfactorily and if it is appropriate for the

research to move to the next stage.

Feasibility

Testing

Research

Concept

Stage 2

Marketresearchresults

(Tools 1,2 & 3)

Stage 3

ConceptDevelopment

(Tool 4)

Stage 4

ConceptTesting andmodification

(Tool 5)

Stage 5

ConceptValidation(costing,pricing,scale)

Stage 6

PilotTesting

GATE 2:Research mustbe complete,rigorous,appropriatelyanalysed andpresented insuch a way thatthe informationis easy toextract.

GATE 3:Product conceptneeds torespond to theenvironment,clientpreferences,good practicesand MFIbusiness needs.

GATE 4:Analysis of theclientresponse tothe conceptshould lead tofurtherrefinement ofthe product.

GATE 5:Internal analysisof the productshould confirmwith greatercertainty thedesign of theproductprototype prior topilot testing.

Stage 1

Problemdefinition

andresearchplanning

Design

GATE 1:There must be aclear problemstatement. Aplan shouldhighlight thehuman, financialand timeresourcesrequired.

Figure 1 The Controlled Process of Market Research and Concept Development


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ASSESSMENT OF THE MACRO- ENVIRONMENT

This desk study collects secondary, quantitative data from multiple sources. Any successful relief or

development project must look outward to the war-affected environment in which it is operating to predict

future opportunities and help to mitigate future problems and disasters. This tool looks at some of the major

forces that act on MFIs and clients and provides pointers for what should be investigated at the local level in

Tool 2. An understanding of the forces operating at the macro-level is particularly important as normally the

project can do little to influence these and must instead change its behaviour in response. It takes two to

three person days to complete this tool, depending upon the quality and entirety of the information.

Purpose

To know whether or not the macro-environment is conducive to the provision of microfinance.

Resources required

Country information. Some can be purchased on-line from sites such as Political Risk Services

http://www.prsonline.comand Country Watch http://www.countrywatch.com

Other free information is available on a range of sites including ReliefWeb, http://www.reliefweb.int, the

BBC http://news.bbc.co.uk/1/hi/world/africa/country_profiles/default.stm , CIA World Factbook

http://www.ocdi.gov/cia/publications/factbook, 1Upinfo, http://www.1upinfo.com/country-guide-study,

Library of Congress Country Studies, http://lcweb2.loc.gov/frd/cs, Alertnet Country Profiles,

http://www.alertnet.org, International Crisis Group, http://www.intl-crisis-group.organd Global IDP

Project, http://www.idpproject.org. Information may also be obtained in country from government, local

and international agencies.

Methodology

1. Gather together multiple sources of information relating to the framework for the assessment of the

macro-environment on pages 3-5. In war-affected areas, data can be more biased, outdated and

inaccurate than usual, so it is important to use several sources where possible.

2. Draw out the requisite data from the information sources, triangulating (using different sets of data

and different types of analyses) where possible.

3. Write a brief analysis of the information focusing on opportunities and threats to microfinance. The

theme headings in the framework can be used to structure the report. Note should be made of thesubjects that need further investigation later.

Notes

This tool provides vital economic, social, physical, political and legal information that helps to decide

whether or not the wider environment can support a microfinance organisation. The macro-

environment may seem far-removed from the realities of setting up a microfinance project for low-

income people but MFIs are in fact influenced in all kinds of ways, for example:

Tool

1


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1) Inflation trends show how money has lost value over time and provides an indication of likely

willingness to save in cash.

2) Borrowing and deposit interest rates give a baseline against which to price the new credit or

savings product

3) Distribution of banks shows where there is supportive financial infrastructure for groups or the MFI

to safely deposit savings.

4) Understanding the legal and regulatory environment at the design stage helps to select amicrofinance model and institutional type that can grow without hindrance.

5) The presence of electricity influences the kinds of MIS and accounting systems that could be

developed.

6) Demobilised soldiers have historically proven to be poor microfinance clients. Would the pilot

phase operate in an area with large numbers of demobilised?

7) Returnees are often the most vulnerable. Should an area be selected that has many returnees?

It is essential that this tool is used and adapted with intelligence and flexibility as it will be almost

impossible to gather all of the information suggested; perhaps data will be irrelevant or alternatively only

proxies (or less detailed data) will be available. Therefore, this tool should be taken simply as a guide

and adjusted as necessary.

Framework For Assessment Of The Macro-Environment2

Economic factors

Theme Key element

Existence of price controls

Change in exchange rate over time

Annual inflation rates over time

National rate of saving and investment

Employment/unemployment

Estimate of the number of people living on less than US$1 per day

Major economic activities by province

State of the national

economy

Standard daily wage rate for labourers and office workers

The National Borrowing and deposit interest rates

2Key Elements marked with an asterisk are those that are conflict-specific.

IN PRACTICE In the rush to get the research done it is tempting to pass over this tool and move to ones

that collect more locally relevant information. One research team commented

Practitioners should not skip this tool we did and were probably not as well informed

about the macro-environment as we could have been.

If possible, start collecting material several weeks before you plan to do the analysis. This

makes it relatively simple to draw together the information when you need it.


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Financial System Depth and breadth of outreach of formal banks, insurance companies and

MFIs (either before, during or after conflict)

Distribution of banks, MFIs and insurance companies by province

Banks that will accept deposits from an MFI

Terms and conditions especially those likely to prevent access by poor

e.g. minimum balance, asset-based lending

Opportunities and

Threats to

Microfinance

Forecasts of risk to international business in short and long term

Political factors

Theme Key element

Analysis of political stability and predictions of future political regimes

Most serious threats to microfinance from political sources

Political Influences on

Microfinance

Forthcoming elections

Legal Factors

Theme Key element

Legal and regulatory

environment for

microfinance

Any existing or planned regulation that is likely to affect the provision of

microfinance. Note; reporting requirements, minimum capital

requirements, accounting procedures, registration.

Options for the legal status of microfinance services if it does not come

under specific microfinance regulation (i.e. it could be governed under

NGO provisions or cooperative law) and implications of same

Interest rate ceilings if applicable

Tax rates for different institutional entities

Restrictions on foreign ownership of companies Small business regulation

Infrastructure

Theme Key element

Roads per province (Km gravel and tar sealed roads per Sq. Km.)

Bank branches per province

Irrigated land area per province

Number urban centres

Number of clinics/hospitals by province

Number of primary, secondary and tertiary educational establishments

by province or district

Physical

Infrastructure

Email/telephone/electricity access by province


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Social factors

Theme Key element

Spending on public services as % GDP

Change in pricing of services e.g. education, healthcare

Social services

Access to safe water Literacy rate (male and female) as % of populationNational Education

Levels % Graduating from primary, secondary and tertiary education

Past and projected HIV/AIDS infection rateHealth Status of the

Population Rates of morbidity/mortality

Average land holdingIndicators of Wealth

% Population living below the poverty line

Population density by province or district

Population growth rate

*Nature and extent of loss of human capital during the conflict

% Female-headed households by province or district

Languages most commonly used in each province (if different)

*Status of demobilisation/reintegration efforts. Number of demobilised

soldiers by province

*Number of returnees and returned IDPs

Religious groups

Demography

*Number of refugees and IDPs remaining

*Profile of factions e.g. by ethnicity, class, ideology

*Areas of recent insecurity and nature of insecurity

*Areas where civilians have been most affected by fighting

Current Security

Situation

*Prevalence of conflict by province

*Volume, distribution and type of humanitarian reliefEmergency Relief

Services Prevalence of NGOs and donor agencies by province


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ASSESSMENT OF THE LOCAL ENVIRONMENT

This series of informal discussions (focus group, semi-structured interview and wealth ranking) helps to

collect primary qualitative data on the local environment. The results relating to population movement and

security are particularly important as they help the team to decide whether or not their minimum pre-

conditions for microfinance have been met. The pilot test and the main research study take 12-18 person

days. Additional time will be needed for pre-survey training (length depends upon the experience of staff).

Before the team approaches people in the target area, they should consider how they will presentthemselves, as early impressions can take years to shake off. Whilst NGOs inspire trust and openness, they

are also associated with free handouts during and after armed conflict, which has made it difficult for some to

recover loans. If there is a plan to create an independent MF provider or a community managed

organisation, consider creating this image at the research stage.

Purpose

To understand the local environmental conditions and how they influence the provision of microfinance.

Resources required

Skilled facilitators

Facilitator copies of the questions to spark discussion

Transport

Accurate list of names of all adults living in the sample area

Name cards

Sampling procedure

Purposive sampling should be used (see details on page 34). This involves determining the

characteristics of the ideal respondents at the planning stage and then actively seeking out these

people as interviewees. Focus groups should be held with separate groups of men and women.

Methodology

1. Train the research team in the techniques of facilitating focus group discussion, semi-structured

interview and wealth ranking. They also need to understand the concept of purposive sampling.2. Translate the questions. When done as a group exercise this helps the team to understand the

nuances and purpose of each question. Rarely is external translation accurate enough

3. Meet with local authorities to inform them of the research and gain their support and co-operation.

4. Do a pilot test and further develop the tool in response to the feedback.

5. At the end of each day, analyse the data together, to ensure that the results of previous interviews

inform future questioning.

6. A brief qualitative report should highlight i) Findings significant to the design of the product ii) Areas

that require future in-depth investigation.

Tool

2


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Notes

The table below details the interview themes and the methods of data collection.

Method and subject of data collection Number

interviews

Participants per

interview

1. Wealth ranking - Defining poverty characteristics 2-4 1-3

2. Focus Group discussion (FGD) - Markets and transactions

3. FGD - Security, population movement & risk exposure

4. FGD - Social capital and gender

2

2-4

2-4

6-12

6-12

6-12

5. Semi-structured Interview (SSI) - Household finance 6-10 1

Interviews should be conducted with separate groups of men and women. An equal number of men

and women should be interviewed. The number of interviews suggested above is only indicative and it

will be necessary to assess the quality and clarity of the data collected to work out whether or not

further interviews need to be performed.

This activity requires skilled facilitators who can put interviewees at ease and probe in an unthreateningway into the reasons that lie behind straightforward answers. The questions presented below are a

trigger list (and not a question list), which should help the facilitators to develop more detailed

questioning during the interview. Data analysis should be qualitative and the final output should be a

brief report.

Strong co-ordination is required for this tool to run smoothly. Several days before the interviews will be

held, a co-ordinator should visit the area to gain the support of the local leaders and make

appointments to meet interviewees. The purpose of the interviews should be made clear to them so

expectations of future financial support are not created.

IN PRACTICE Consider the reputation of other NGOs in the area and how you wish to be perceived.

As one person who used this tool remarked Everyone knew that (the MFI) had been

designed by people who drove to the market place in a big NGO Land Cruiser every

day. Trying to make it independent afterwards was always going to be difficult.

Discussing changed gender roles was upsetting for some women interviewees in

Rwanda who had either lost husbands during the genocide or were supporting them in

the local jails. This subject should be handled with sensitivity and tact. There are few

references to the armed conflict in the tools, as interviews seem to go better without.

Inexperienced facilitators often need to be encouraged to listen for and follow up leads in

the conversation, rather than sticking rigidly to the question framework.

One team that used this tool stated that during their data analysis meetings they should

have discussed about the changed mindset of the people, as perceived by the

facilitators. This they thought would have helped them to understand better about the

immediate priorities of potential clients affected by armed conflict.

Having completed this tool, it is important that the researchers can construct i) A

comprehensive list of the benefits respondents think microfinance offers ii) A list of the

local providers of microfinance iii) The main reasons why people save and borrow.

These will be used in Tool 3.


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Framework for Assessment of the Local Environment

1. Wealth ranking - Defining poverty characteristics

2. FGD - Markets and transactions

3. FGD - Security, population movement & risk exposure

4. FGD - Social capital and gender

5. SSI - Household finance

1. Wealth ranking: Defining poverty characteristics

Plan to do wealth ranking with two to four groups, comprising one to two groups of women and

one to two groups of men. There should be homogeneity within groups but heterogeneity

between groups. Each group should be selected based on characteristics that are important for

the research (such as wealth, sex, experience during the conflict). Remember that the

purpose is not to rank every single potential client but to build up a profile of the characteristics

of different socio-economic groups in the area. Therefore, the notes from the discussion that

takes place are more important than the ranking itself.

1. Define the sample area (this should apply for the entire research process). If it is large,

select smaller administrative areas, of for example 100 households, in which the wealth

ranking will be carried out.

2. Prior to the wealth ranking sessions, collect the names of all household heads in the

smaller administrative area and write each name on a separate, small piece of card.

3. To start the session, in view of the group, select at random 20 to 40 names from the pack

of cards. There is no need to rank more than 40 as the purpose is only to identify

characteristics of socio-economic groups.

4. Read out each name and check that the group is familiar with each of the names.

5. Ask the group to take from the pack of cards one person who is well off and one who is

less well off. The indicators of wealth and poverty should be decided by the group and notsuggested by the facilitator. Lay the cards side by side, the less well off to the left of the

other.

6. Select a third card and ask whether this person is wealthier than the other two, poorer, or

somewhere in the middle. Place the card beside the other two in the row, maintaining the

progression from the very poorest on the left to the wealthiest on the right. Ask the group to

explain why this person is wealthier or poorer.

7. When the facilitator feels that the group understands the process and if there is a literate

person in the group, the cards can be handed to a participant who will read each name

aloud and together with the group place the card in the appropriate position. For each

card, they simply need to explain their reasoning to the facilitator for her to note down.

8. At the end, the facilitator should review the ranking with the group to check that it is correct

and then should write the ranking of each individual on their card.

Supplementary Wealth Indicators

The research team can use the results of the wealth ranking to develop an index of visual

poverty indicators. These can be substantiated through interviews with community

members such as teachers, religious leaders, local elders and political leaders. Cashpor,

TSPI and SHARE have developed such indicators for their own contexts, summarised at

http://www.microfinancegateway.org/poverty/target/hi.html.


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2. Focus Group Discussion: Markets and Transactions

Use the results of the wealth ranking to identify people from different socio-economic and age

groups to interview. Plan to carry out around two FGDs on this topic, one with a group of

women and one with a group of men, but do more if a clear picture does not emerge from the

results.

Theme Seed questions

Which markets do you know of in this area? Which do you visitregularly and why do you choose to go to these ones?

Which are the most popular markets and why are they visitedregularly?

On which days of the week do you visit the markets?

Which are the biggest? Which are the smallest? Approximatelyhow many people sell goods at these markets?

Prevalence ofmarkets

In your view, why dont more people attend the market to sellgoods? What are the root causes and potential solutions?

At the market, which goods do ordinary people buy most often? Dothey pay for these in cash or in kind?

What currencies do people normally use to buy goods?

Which currency do sellers most prefer to receive as payment forgoods? Why? In which currency do people most like to save?Why?

What kinds of people most often use barter rather than cash? Whatdo they usually exchange?

Kinds and

Frequency of

Transactions

Does money buy the same amount of goods now as it did a yearago? How can you tell?

Have you ever had any problems in buying or selling goods at themarket?

How do you travel to each market? What is the cost of getting toeach of them and how long does it take?

If you go by vehicle, have the prices changed recently?

Accessibility ofmarkets

Do any traders sell on credit? What do they sell? What is thequantity that can be borrowed and how much must be repaid?

Seasonality Which products (or services) do you sell at the market orsomewhere else?

In which months do you sell each of these products (or services)? In which months do you make money that you can save? In which months do you need to borrow money?


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3. Focus Group Discussion: Security, population movement and household risk

exposure3

Plan to carry out approximately four FGDs, two with groups of women and two with groups of

men. Use the results of the wealth ranking to identify people from different socio-economic and

age groups. There is no need to ask all of the questions in a single FGD each can have a

slightly different focus. Do additional FGDs if a clear picture does not emerge.

Theme Seed questions

*Have you heard of attacks on international or local agenciesin this area? When and where did they happen? Who isthought to be responsible? Are they still in the area?

*Have you heard of people having money or goods stolenlocally? When and where did this happen? Who is thought tobe responsible? Are they still in the area?

*Have you heard of banditry in the area? Who is targeted?When and where were the last attacks? Which areas arethought to be most dangerous? Who is thought to be

responsible? Are they still in the area? *Are the fighting factions still militarily active in the local area?

Security risks

*Are there local areas that remain insecure and where you stillfear to go? What do you think is the major risk in those areas?At what times of day are these places most insecure?

Is there a history of people moving away from this area? Whyhave they left and where have they gone?

*Are there people in this area who were IDPs or refugees?

*Where did they seek refuge? When did they return?

*Are there IDPs and/or refuges in the local area?

*Where have the IDPs and/or refugees come from?

*How long are the IDPs/refugees likely to remain in the area?Do they appear to be settled?

*How integrated with the local community (social, physical,economic integration) are they?

Population movement

*Who provides or has in the past provided support to thesegroups? Has there been any credit, grants or relief provided?Have you received credit, grants or relief? What exactly wasprovided and what has the outcome been?

*Are people doing new economic activities that you think arehigh risk (e.g. crossing minefields to trade, gunrunning orprostitution)? Which are the most at risk groups? How did theybecome involved in the activity?

What are considered the major potential threats to households

today (e.g. banditry, kidnapping, ill health, death of incomeearner, looting, landmines, guerrilla activity)? Who are themost vulnerable members of the household? Why?

How do households mitigate these threats?

*What have been the major problems experienced byhousehold since the end of conflict/because of the conflict?

Risk exposure andcoping mechanisms

*How have households solved these problems?

3Seed questions marked with an asterisk are those that are conflict-specific.


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4. Focus Group Discussion: Social capital and gender

Plan to carry out approximately four FGDs, two with groups of women and two with groups of

men. Use the results of the wealth ranking to identify people from different socio-economic and

age groups. Do additional FGDs if a clear picture does not emerge.

Topic Seed questions

In the past few years what changes have taken place in reciprocalarrangements, membership of associations and groups,community problem solving, safety nets, relations within andbetween groups?

With which households or individuals does your household co-operate or interact most closely? In what ways do you work or dosocial activities together? Is there a formalised agreementwhereby one does something for the other in return i.e. areciprocal arrangement?

What associations and groups does your household belong to?

How does your household try to solve its own problems and theproblems of others (e.g. internal household arrangements andalso burial societies, contributions at weddings, communalresponse to natural disasters and emergencies)?

How are different kinds of problems within a household, betweenhouseholds or between communities normally resolved in thisarea?

(If appropriate) What distinct groups/clans exist within thecommunity and what is the nature of the relations within andbetween these groups?

Has there been any change in the relations between rich and poorin recent years?

Social capital that isperceived to existwithin the community

How do you get involved in community decision-making? Do youattend open political meetings? How do you find out aboutdecisions made at higher levels?

When you compare yourself to the local leaders are they like youor different? In what ways are they the same and in what waysare they different?

What are the crops that women are mainly responsible forcultivating? Do they receive assistance (finance, land or labour)from men and who owns the final crop? Which are sold and whichconsumed by the household?

What are the crops that men are mainly responsible forcultivating? Do they receive assistance (finance, land or labour)

from women and who owns the final crop? Which are sold andwhich consumed by the household?

From which income generating activities do women in thecommunity earn cash? From which do men earn income?

If women have earned money from an economic activity whodecides how the money is spent and what are the most commongoods or services that are purchased?

Role of men andwomen in economicactivity

If men have earned money from an economic activity who decideshow the money is spent and what are the most common goods orservices that are purchased?


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What are the three most important resources that women areresponsible for managing? And which for men?

Are men/women allowed to be employed outside of thehousehold?

Do men or women traditionally look after cash in the household?

When a loan is taken, how is the decision made about how the

loan is used?

Role of men andwomen in financialactivity

Within the household, who actively saves? Once a lump sum hasbeen accumulated by men/women, who owns that money or assetand what is it normally spent on?

What groups for accessing credit or for saving are women/meninvolved in?

What role do women generally have in developing andmaintaining social relations with other households and what roledo men have?

Are there myths or beliefs that hinder men or women fromundertaking more roles or activities?

What work groups are women/men a part of?

What groups for community/social events such as weddings andfunerals are women/men involved in? What responsibilities dothey have within these groups?

Can women own land? Can men own land? What kinds of peoplein the area have land title?

Role of men andwomen in socialactivity

(If appropriate) How long have these different social arrangementsbeen in existence and have they been altered by the armedconflict?

Are there any differences between households in the role of theman and woman? (e.g. In some households perhaps the manmakes all the decisions, controls all of the resources and owns allof the assets, whereas in others perhaps the man and womanmake decisions jointly, share control of the resources and each

own assets). If this is the case why do the differences in socialrelations exist?

5. Semi-structured interview: Household finance

Plan to carry out ten semi-structured interviews with five women and five men. Use the results

of the wealth ranking to identify people from different socio-economic and age groups.

Topic Seed questions

If you had no money, in case of emergency what would you do?

What are the most serious threats to your household at themoment?

Copingmechanisms

In this area, what amount of cash would most averagehouseholds wish to keep available in the house in case of a smallemergency or general expenditure?


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What are the main ways in which your household gets cash andfood (think of what every member of the household does)? Havethey changed in the past few years?

Which are the main cash and food crops in the area? Which arethe most risky, which yield the highest amounts of profit or foodand which are preferred? For each crop mentioned; When is

money invested? When is the most labour needed? What kinds ofnatural resources and inputs are used? How long does it take forprofit to be realised after the initial investment?

Nature ofproduction/tradecycles

What are the most important economic or social opportunities foryour household at the present time? What resources are requiredto exploit the opportunity?

How do you prefer to save if you ever have spare money that youcan manage not to spend?

How have your preferences for saving (in cash and in kind)changed over time?

Asset preferences

What have been the overall trends in terms of ownership ofproductive assets (e.g. land, livestock) for people in this area?

Which individuals and groups are you aware of in the localcommunity (no matter how formal or informal) that offer eitherdeposit services or loan services? (E.g. Banks, Credit Unions,Post Office, MFI, moneylender, friend that lends money, moneyguard, trade credit, deposit collector, RoSCA, ASCA, reciprocallending arrangement, funeral associations). What are the termsand conditions?

Why do you normally borrow money?

Why do you normally save money or build up assets?

When you borrow or save money outside of the home, what is itthat makes you choose the individual or group (formal or informal)

that you normally use? Why dont you use some of the otherproviders that you mentioned?

Do you send or receive remittances or enter any informalarrangements where money is transferred? Does anyone youknow do this?

Microfinanceservice providerpreferences

Do you lease equipment or enter any informal arrangementwhere you pay to use the equipment belonging to someone else?Does anyone you know do this?

Looking back, on what occasions has it been necessary tounexpectedly have to spend large amounts of money. What hasthe money been used to purchase? From where or whom haveyou got the money?

Householdexpenditure

When you have money, what do you most commonly spend themoney on? What are the expensive things that you try topurchase less frequently?


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USAGE, ATTITUDE, IMAGE (UAI)

QUESTIONNAIRE

This formal questionnaire collects primary quantitative data. It identifies the special experiences,

behaviour and preferences with regard to microfinance services of potential clients who have been

affected by armed conflict, and takes approximately 30 minutes per questionnaire. The tool is simplified

from a UAI questionnaire described by Alexandra Overy Miehlbradt in her Guide to Market Assessment

for BDS Program Design, 2001.

Purpose

To gather information about the microfinance market, which can then be used to design appropriate

microfinance interventions.

Resources required

Accurate list of names of household heads living in the sample area

List of the important benefits and features provided by microfinance (collected in Tool 2)

List of reasons why local people save and borrow (collected in Tool 2)

List of reasons why people do not use particular microfinance services (collected in Tool 2)

The range of bank and non-bank microfinance services operating locally (collected in Tool 2)

Skilled interviewers

Copies of the questionnaire

Definitions of service providers for question 2

Transport

Sampling procedure

Stratified random sampling (see detailed guidelines on page 32) helps to ensure that the minority

groups in the community are properly represented in a survey. The entire sample population is

divided into categories and then a proportion of each sample is selected at random to take part in

the survey.

Methodology

1. Adjust the questionnaire to the local situation by inserting the list of local service providers

throughout the questionnaire and the local options into questions 4, 12 and 14

2. If needed, translate the questionnaire as a group exercise with the research team to ensure they

all understand the nuances and purpose of each question.

3. Train the research team in administering quantitative questionnaires. This training should be

very practical, culminating in a test of each interviewer. The team also needs to understand the

concept of stratified random sampling.

Tool

3


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4. Meet with local authorities to keep them informed, if necessary.

5. Do a pilot test and further develop the questionnaire in response to the feedback. Pay particular

attention to the relevance of the coded answers and ensure that every question is easily

understandable without further explanation from the interviewer.

6. Transport the team to the field and aim for each person to perform 8 questionnaires per day

NotesThis tool has been adapted and simplified in order for it to be useful in rural as well as urban war-

affected environments. It relies wholly upon verbal communication, which means that it can be used

with respondents that have no literacy skills and it also attempts to reach a compromise between

high quality market research and the low budgets that are generally available for research.

The questionnaire occasionally offers a choice of answers to questions. These are notdesigned to

be read aloud to respondents. Instead, the answers that respondents volunteer should be

categorised (coded) by the interviewer, using the list of possible answers on the questionnaire.

IN PRACTICE When time has been limited, the survey has been shortened rather than the sample size

reduced. Hire a professional to design a Microsoft Access relational database that can be used for

inputting and storing the large amount of data that will be collected. The database designshould take one to two days work and there are significant benefits over an Excelspreadsheet in terms of reducing input error, speeding up data input and having a user-friendly platform storing baseline data that can be easily accessed at a later date. Thedatabase need not be designed to analyse the data as its as easy to copy and paste the finaldataset from Access into Excel and use pivot tables.

Early prototypes of this questionnaire were too time consuming to administer. It is now anacceptable length but any additional development of the questionnaire should not furtherincrease its length.

Inexperienced interviewers like to facilitate discussion of survey questions but this cannot be

allowed as it influences the interviewees response. At the pilot test stage, the team needs tomake sure that every question can be answered easily without the need for clarification fromthe interviewer.

If leasing or remittances are mentioned during discussions in Tool 2, develop thisquestionnaire appropriately.

Women interviewees respond better to women interviewers.


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Nb All coded answers in this questionnaire need to be modified to reflect the local situation basedon the results of previous research and pilot testing of the questionnaire

Usage, Attitude, Image Questionnaire On Microfinance Services

Interviewed by: Date:

Interview number:

Time Started

Name of respondent: House no.

Location:

Male/Female (CIRCLE)

Age of respondent: (respondent must be aged over 18 years)

Housing characteristics (modify based on wealth ranking findings)

Quality of roof Thatch Tin or CI sheets Permanent

Quality of walls Poor Average GoodQuality of Floor Compacted mud ConcreteCleanliness Poor Average GoodNumber of rooms 4Structural condition Dilapidated Average Good

Back-checked by: Date:


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Awareness, Knowledge And Trial Of Services

Q1 Which of these services have you heard about? READ OUT LIST OF SERVICE PROVIDERSFROM BOX BELOW

Yes 1 No 2

Q2For each service heard about, ask:What do you know about the (name service)?CHECK WITH DEFINITIONSFully understand 1 Partially understand 2 Wrongly informed 3

Q3For each service that the respondent understands, ask:Has your household ever used the (name service) ?

Yes 1 No 2

Type ofproduct

Service provider Q1 Aware Q2 Understandthe service?

Q3 Everused?

Individual

Community initiated and managed

Externally initiated and managed

Savings

Regulated bank

Individual



Credit

Regulated bank


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Use Of Services

Ask questions in this section for each service ever used (Q3). Fill out the chart below for Q4-5.

Q4 Why did you decide to purchase (name service) the first time? (multiple answer)1. Needed finance for business 6. Needed money to repay a debt

2. Needed school fees 7. Needed money to cultivate land3. Needed household security 8. Needed money for food4. Wanted to purchase a house 9. A family member was sick5. Needed money for a celebration 10. Other (specify)

Q5 How often does your household use (name service)?1. Every two weeks or more2. Not every two weeks but at least every month3. Not every month but at least every three months4. Not every three months, but at least every six months5. Not every six months but at least every year6. Not every year but at least every two years

Type ofproduct

Service provider Q4 Whypurchased?

Q5 Frequency

Individual



Savings

Regulated bank

Individual



Credit

Regulated bank

Cost Of Services

Q6-10 will be post-coded.

Q6 When you last saved money regularly what was the interest rate or fee?

Q7 When you last saved money regularly how much money did you save?

Q8 When you last took a loan what was the interest rate or fee?

Q9 When you last took a loan how much money did you borrow?

Q10 When you last took a loan for how long did you borrow the money?


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Suppliers

Repeat questions in this section for each service respondent has ever used (Q3).

Q11 The last time you used (name service) who provided the service?1. An individual (specify whether friend, relative, neighbour etc.)2. An NGO (give name)3. A business (give name and type e.g. coffee buyer4. Government scheme (give name)

Q12 Why was this particular service supplier chosen?(Multiple answer)1. Interest rate/fees were low 6. They made decisions quickly2. It was the cheapest 7. They gave instant access to savings3. The organisation is trustworthy 8. It was free4. It was the only one available 9. I was persuaded to join5. They provided the best service 10. Other (SPECIFY)

Q13 Compared to your expectations, how satisfied were you the last time you used the service?

1. Extremely satisfied2. Satisfied3. Dissatisfied4. Extremely dissatisfied

Reasons For Non-Purchase Of Services

Ask questions in this section for each service that respondent understands (Q1 Aware) but has neverpurchased (Q3 Ever purchased)

Q14 Why has your household never used (name service)? (Multiple answers)1. Too poor 6. Get it for free2. Don't need 7. Did not have a guarantee3. Too expensive 8. Terms and repayment period difficult4. Save in the house 9. Did not trust them5. Unavailable in this area 10. Was not eligible

Type ofproduct

Service provider Q11 Lastsupplier

Q12 Whythissupplier?(Multipleanswersallowed)

Q13Satisfaction

Q14 Nonpurchasereasons(multipleanswersallowed)

Individual



Savings

Regulated bank

Individual



Credit

Regulated bank


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Perceived Value Of Services

Ask questions in this section for all microfinance services

Q15 Please rank the importance of these services for the day to day running of your household andeconomic activities.

4=Extremely important 3=Quite important 2= A little important 1=Not important 0=Don't know

Type of

product

Service provider Q15

Importance

Individual



Savings

Regulated bank

Individual



Credit

Regulated bank

Respondent Characteristics

Writenumber

Q16 How many people live in your household?

Q17 How many people does your household support?

Q18 How many people are able to work in your household?Q19 What land area does your household own?

Q20 What are the main ways in which your household produces food and earns money?(OPEN ENDED)

Q21 Are there any other financial services that you think might be important for your household or for

your livelihood activities? (OPEN ENDED)

Time ended

THANK RESPONDENT AND TERMINATE INTERVIEW


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PRODUCT DESIGN WHEEL

This is aprocess of synthesising and analysing informationon client needs, MFI business needs, other

microfinance providers and microfinance good practice (no matter how harsh the war-affected

environment the new microfinance product must conform with microfinance good practices). Together,

the research team analyses primary and secondary data to create a competitive and attractive

microfinance product concept . The entire team will be involved in a session that lasts 0.5 day.

Purpose

To identify the characteristics of a microfinance product and delivery mechanism that will be most

competitive and attractive within the market place.

Resources required

Donor Guidelines for Microfinance International Best Practice http://www.gdrc.org/icm/inspire/donor-

guidelines.html

The entire research team

Flipchart paper and pens

Detailed information on the products offered by other microfinance providers locally

Summary of results from tools 2 and 3

Methodology

1. Prior to the workshop, ensure that each workshop participant has had time to read the summary of

results from tools 1-3 and the Donor Guidelines for Microfinance International Best Practice.

2. On poster paper, draw several Product Design Wheels prior to the workshop.

3. Starting with the Client Preferences Wheel, use information gathered using Tools 2 and 3 to

complete each section in the wheel. Emphasise that this is their wish list, which most likely will

need to be adapted to create a product that can be sustainable.

4. Next identify all of the different formal and informal institutions that offer microfinance services in the

community (See results of Tools 2 and 3).5. Complete a Competitor Product Wheel for each competitor.

6. Finally, mindful of microfinance good practice, MFI business needs, client preferences and

competitor products, on the Product Design Wheel brainstorm the ways in which the MFI could

create a new product that would be most attractive to potential clients.

7. Agree upon the characteristics of the product concept that will be developed.

Tool

4


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People

Physicalevidence

Process

Place

Promotion

Price

Product terms

and conditions

Clients

People

Physicalevidence

Process

Place

Promotion

Price

Product termsand conditions

Competitor1, 2 etc

People

Physicalevidence

Process

Place

Promotion

Price

Product termsand conditions

Newproduct

Client Preferences Wheel

Competitor Product Wheel

New Product Design Wheel


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PRODUCT CONCEPT AND PRICE SENSITIVITY

QUESTIONNAIRE

This formal questionnaireenables the team to collect primary quantitative data on the reaction of potential

clients to the proposed microfinance product. It takes 20 minutes per questionnaire. This tool is adaptedfrom the Micro-enterprise Best Practice Technical Note by Alexandra Overy Miehlbradt (1999) Applying

Market Research Tools to the Design and Improvement of Business Development Services.

Purpose

To know the reaction of potential clients to the proposed microfinance product design.

Resources required

Accurate list of names of all adults living in the sample area

Skilled interviewers

Copies of the questionnaire

Show cards to accompany the questionnaire

Transport

Sampling procedure

Stratified random sampling should be used (see detailed explanation on page 32)

Methodology

1. If necessary, provide refresher training

2. The product concept at the beginning of the questionnaire is critical. This must be clear, accurate

and unambiguous and it should describe the most important aspects of the 7Ps

3. Determine the price scale for question 7 and adapt answer options in questions 2 and 3 using

information collected by Tool2.

4. Translate the questionnaire as a group exercise with the research team to ensure they allunderstand the nuances and purpose of each question.

5. Meet with local authorities to keep them informed, if necessary.

6. Do a pilot test and further develop the questionnaire in response to the feedback. Pay particular

attention to the relevance of the coded answers and ensure that every question is easily

understandable without further explanation from the interviewer.

7. Transport the team to the field and aim for each person to perform 10 questionnaires per day.

Tool

5


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IN PRACTICE This tool has been used most successfully when an unambiguous and detailed product

description has been created.

Finding the correct respondent identified in the sample design can easily become a

tedious and time consuming exercise unless careful planning is done. Intervieweesassigned to one interviewer should be grouped according to their proximity to each

other. As with Tool 3, it is possible to use a simpler random sampling methodology

where an interview is performed with every tenth household on a pre-defined route, but

there is the danger that minority groups are not represented in adequate numbers to be

able to draw conclusions from the data.

Women interviewees respond better to women interviewers.

A separate questionnaire should be created for each product concept that is tested.

People selected for previous interviews need not be purposefully excluded from this

survey. It is however important that all are selected at random using the stratified

random sampling methodology.


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Nb All coded answers in this questionnaire need to be modified to reflect the local situation basedon the results of previous research and pilot testing of the questionnaire

Product Concept And Price Sensitivity Questionnaire

Interviewed by: Date:

Interview number:

Time Started

Name of respondent: House no.

Location:

Male/Female (CIRCLE)

Age of respondent: (respondent must be aged over 18 years)

Housing characteristics (modify based on wealth ranking findings)(tick)

Quality of roof Thatch Tin or CI sheets Permanent

Quality of walls Poor Average GoodQuality of Floor Compacted mud ConcreteCleanliness Poor Average GoodNumber of rooms 4Structural condition Dilapidated Average Good

Back-checked by: Date:


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Reaction To Product Concept

Read out a detailed description of the service concept (This description should be written on a card so thatliterate people can hold the card and read with the interviewer. However, the interviewer should neverassume literacy and therefore should always read the text aloud.) e.g.

This microfinance service allows you to save money safely with a female representative who

would visit the village every day. You could deposit with her as much or as little of your

money as you wanted. The amount is up to you according to what you can comfortably

afford. There is no minimum or maximum amount. Your deposited money would be written

down for your records in a small book. Your money would be stored safely in a bank, but if

you needed to take out your money in an emergency you could do so by giving our

representative one days notice. This is a particularly safe way of storing money because it

cannot be stolen or lost. It is also accessible because by giving just twenty-four hours notice,

you will receive your money. A small fee is paid which covers our representatives visiting

your village every day and our storing your money safely.

Q1 What do you think about the microfinance service that I have described?.What else do youlike?What else do you dislike?(Write down response word for word).

Q2 I am now going to read out some characteristics of savings and credit services (informal or formal). I'llread them through from beginning to end, once, and then I'll read them out again one by one. Foreach characteristic please tell me if you believe that:

1=There is no service that offers this feature satisfactorily to your household2=There is at least one service that offers this feature satisfactorily to your household3=There are many services that offer this feature satisfactorily to your household.

Characteristics Q2 Satisfaction(rank each)

Fast access to savingsFlexible savingsOption to save daily and borrow daily

Individual productCredit agents in the village or coming to the villageStaff that are friendly and respectful towards clientsSafety of moneyWaiting/meeting timeConfidentiality


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Q3 Which of these characteristics is most important to your household? Which is the secondmost important?

Most important = 1 Second most important = 2

Characteristics Q3 Most important characteristics (choose two)

1

st

most important 2

nd

most importantFast access to savingsFlexible savingOption to save daily and borrow dailyIndividual productCredit agents in the village or coming to thevillageStaff that are friendly and respectful towardsclientsSafety of moneyWaiting/meeting timeConfidentiality

Q4 How often would you like to use the service described above?

Frequency Q4 Tick one

Every dayTwice a weekOnce a weekOnce every two weeksOnce a monthOnce every three monthsOnce every six monthsOnce a yearLess frequently than once a year

Q5 Overall, how important would you say that the service described above would be for yourhousehold?

Q5 Tick one

Extremely or often helpful to your householdSomewhat or sometimes helpful to your householdA little or occasionally helpful to your householdNot at all helpful to your household

Q6 Based upon what I have told you about the microfinance service, how interested would yoube in using the service:

Q6 Tickone

Definitely interestedProbably interestedProbably not interestedDefinitely not interested


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Q7 At what cost on this line do you begin to feel that you would no longer be interested in saving1000RFr with the microfinance service? The numbers on the card represent Rwandan Francs. Forevery 1000 RFr saved, the service would receive the amount on the card in payment for collecting andsafely storing your money. (circle).

2 4 6 8 10 12 14 16 18 20

Q8 If at (mention price threshold), you would no longer be interested in (saving), where or with

whom would you (save?).

1.

2.

3.

Respondent Characteristics

Write number

Q9 How many people live in your household?

Q10 How many people does your household support?

Q11 How many people are able to work in your household?

Q12 What land area does your household own?

Q13 What are the main ways in which your household produces food and earns money?(OPENENDED)

Q14 Are there any other financial services that you think might be important for your household or

for your livelihood activities? (OPEN ENDED)

Time ended

THANK THE RESPONDENT AND TERMINATE THE INTERVIEW


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Road Forward

The tools presented in this document offer a summary framework for conducting market research.

Additional resources will be required and this section provides some guidance as to where to consult

appropriate information. These complement the tools by providing more detailed information on the process

or by explaining what should happen after the product concept has been developed:

1. Essential research Knowledge: Sampling

2. Essential Research Knowledge: Methods of Data Collection

3. Next Steps: Pilot testing the product concept

4. Next Steps: Business Planning

1. Essential Research Knowledge: Sampling

1.1 Purposive Sampling

Used for focus groups and semi-structured interviews. This is a relatively quick and cheap way ofgetting a targeted sample.

The characteristics of people considered important to the research e.g. the poorest, community

opinion leaders, IDP returnees, refugees, the demobilised are targeted.

People who fit each criteria are identified by asking knowledgeable people within the community.

1.2 Stratified Random Sampling

Stratified random sampling is particularly useful for microfinance research where it is possible that the

very poorest, or other minority groups, would be under-represented in a simple random sample. It is

more expensive than a simple random survey but usually worthwhile in terms of the quality of the data

that can be obtained.

It requires an accurate list of every household in the defined sample area, which can normally beobtained from local government or camp managers.

One or two groups of local people who know the community well should be asked to group the

population according to specific criteria.

An example of how the population can be divided into groups is shown in the table below. Criteria can

be changed depending upon the priorities of the research team.

The criteria in the example above give rise to 12 possible categories, see table below, and this should

be the maximum number produced, to maintain a reasonable sample size in each category :

Household type Less poor Quite poor Very poor

Male headed

Female headedChild headed

Approximately 10% of each category should be sampled but the proportion should be increased if some

categories contain few people (see example of child headed households in table below):


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Household type Less poor Quite poor Very poor

Total

no.

Sample

no.

Total

no.

Sample

no.

Total

no.

Sample

no.

Male headed 600 60 1500 150 500 50

Female headed 400 40 800 80 400 40

Child headed 4 4 50 25 100 30

Create a list of names of households in each category and assign a unique number to each. For each

category use a random number chart (available on the Internet) to select at random the pre-agreed

number of households.

Agree contingency plans for when people selected from the list are unavailable for interview.

If a list of names cannot be obtained and stratified random sampling is therefore too difficult, the second

best option is random sampling where every tenth house in a village is selected during a random walk.

Further Resources on Sampling Procedures

Sample size calculator: http://www.questaresearch.com/calc_ss_std.php

Random number table (1-600)

http://www.mrs.umn.edu/~sungurea/introstat/public/instruction/ranbox/randomnumbersII.html

Numerous University websites provide guidelines on sampling methodology; access them

through http://www.google.com

David Wilkinson (2000) The Researchers Toolkit: The Complete guide to Practitioner

Research, Routledge Falmer, ISBN 0415215668

Mark Saunders, Philip Lewis, Adrian Thornhill (2000) Research Methods for Business

Students, Prentice Hall, ISBN 0273658042

William G. Zikmund (2003) Business Research methods, Thomson South Western, ISBN

0030350840

2. Essential Research Information: Methods of Data Collection

2.1 Focus Group Discussion

Prior to the discussion, the team should translate and refine the suggested themes and seed

questions, adding, subtracting or amending where members think necessary.

Select groups using purposive sampling (see below).

Groups should include no less than 6 and no more than 12 people.

The group members should be selected on the basis of their homogeneity and similar backgrounds.

Groups should be single sex.

Try to ensure that the discussion is held in a quiet place where you are not going to be interrupted.

Encourage everyone to introduce themselves at the beginning of the session and pass a sheet of

paper around the group, asking a literate group member to record the names if necessary.

Explain the purpose of the interview at the beginning.

Start the interview with unthreatening more general questions and towards the end move to more

sensitive topics.

nfo


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It is imperative that the seed questions are not regarded as exhaustive; Questions are suggested to

illustrate the kinds of areas that should be investigated.

Probe to increase validity, clarity and completeness of the response.

Take notes during the session and if possible bring along a designated note taker.

The research team should meet daily to carry out a verbal analysis of the data, concentrating on areas

where questioning has thrown up surprising information or information that affects microfinance

provision.

2.2 Interviewing - Semi-structured interview (Personal Interview)

Prior to the discussion, the team should translate and refine the suggested themes and seed

questions, adding, subtracting or amending where members think necessary.

Select individuals using purposive sampling and ensure that people of both sexes, with a variety of

ages, backgrounds and religions are included. If there are different factions within communities,

ensure that they too are represented.

If it is socially acceptable, try to ensure that the discussion is held in a quiet place where you are not

going to be interrupted.

Explain the purpose of the interview at the beginning. Stress the confidentiality of the interview, its

approximate length, the voluntary nature of participation and that the client will have an opportunity to

ask questions.

Start the interview with unthreatening more general questions and towards the end move to more

sensitive topics; semi-structured interviews are the main opportunity to ask the most sensitive

questions that the team has.

It is imperative that the seed questions are not regarded as exhaustive; Questions are suggested to

illustrate the kinds of areas that should be investigated.

Probe to increase validity, clarity and completeness of the response.

Take notes immediately after the each interview.

Meet daily to carry out a verbal analysis of the data, concentrating on areas where questioning has

thrown up surprising information or information that affects microfinance provision.

2.3 The Questionnaire

The research team should translate the questionnaire together to gain a complete understanding of

how it should be administered.

Ensure that it is pilot tested to remove ambiguous phrases and to clarify coding.

If it is socially acceptable, try to ensure that the discussion is held in a quiet place where you are not

going to be interrupted.

Explain the purpose of the survey, the kind of information sought and how it will be used.

Stress the confidentiality of the interview, its approximate length, the voluntary nature of participation

and that the client will have an opportunity to ask questions at the end. Ask the questions exactly as written and in the order presented. Do not ask probing questions; the

questions should be self-evident. If in the pilot test it appears that they are not, they need to be

changed.

Maintain a conversational level of communication and a comfortable rapport.


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Further Resources on Methods of Data Collection

William G. Zikmund (2003) Business Research methods, Thomson South Western, ISBN

0030350840

Mark Saunders, Philip Lewis, Adrian Thornhill (2000) Research Methods for Business

Students, Prentice Hall, ISBN 0273658042

Alexandra Overy miehlbradt (1999)Applying Market Research Tools to the design andImprovement of BDS, Technical Note, Microenterprise best practices

http://www.mip.org/pdfs/mbp/applying_market_research.pdf

Geoff Lancaster (no date) Marketing Research, DA Group, http://www.da-

group.co.uk/geoff/research.htm

Market Research for Microfinance. A course run by Microsave Africa.

http://www.microsave-africa.com

Monique Cohen and Jennifer Sebstad (2002) Listening to Clients: Tools for Assessing the

Financial Service Needs and Preferences of the Poor, Technical Note, AIMS Project

3. Next Steps: Pilot Testing the Product Prototype

Once the product concept has been developed (Tool 5), the most common mistake is to launch the

product without any further testing. But it is important to remember that at this stage, the product is little

more than an idea. Pilot Testing is a controlled and structured process whereby the organisation

prepares its systems and trains its staff to offer the product and the product is released to the public on a

small-scale with close monitoring. Pilot Testing occurs prior to the big launch of the product and

ensures that glitches have been removed beforehand.

The process of pilot testing requires substantial planning and preparation. An authoritative and thorough

guide to pilot testing for microfinance has been developed by Microsave Africa and is available on their

website at http://www.microsave-africa.com. A summary of the process is presented below:

4. Next Steps: Business planning

Once a new product has been pilot tested, it needs to be fully integrated into the MFIs institutional

structure through the business planning process. In most respects, business planning should differ little

between MFIs in war affected communities and those in war free communities and therefore the

mainstream planning guides listed below are appropriate. It should be emphasised that the ultimate

goal of profitability (sustainability) applies as much in war-affected countries as in war-free ones.

There are however a few areas where managers will find that adjustments need to be made:

nfo

Create thepilot test team

Develop thetesting plan

Define productobjectives

Preparesystems

Model financialprojections

Documentproduct

definitions

Developmarketingmaterials

Evaluate thetest

Commencethe pilot test

Train relevantstaff


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Higher costs: higher fixed and running costs for transport, higher staff costs.

Human resources: Few staff with experience o

Tools for Market Research and Product Concept Development

Documents