What Works in Savings Mobilization - Case Series 1

This first case series focuses on the strategies institutions adopt in marketing deposit services to low-income clients. Institutions face challenges not simply in market competition but also in the level of financial sophistication of their target clients. In many cases, institutions find that their first step is to educate prospective customers about the benefits of saving in a formal institution. This holds especially true for institutions operating in areas where people are accustomed to more informal ways of saving or have had negative experiences associated with the failure of local financial institutions. Institutions need to invest in ways to better understand their markets and the patterns in the demand for their services in order to design the right products and the right product mix. Thus, the marketing strategy adopted by MFIs goes beyond simply selling products; it encompasses an institutional goal of building trust among its existing and prospective customers.

This series looks at four institutions (or groups of institutions), each operating in a financial environment with a distinct level of client sophistication. In each case, the institution tailored its marketing strategies and promotional techniques to the clients’ level of sophistication as well as to the competitive environment.

"Epargnez pour mieux vivre" marketing campaign in Central African Republic

In the first case study, clients of credit unions in the Central African Republic have had very limited experience saving in a formal institution. Thus, the credit unions utilized non-traditional forms of advertising in order to educate potential clients and to convince them of the benefits of saving via more formal means.

The second case study examines the Cooperative Bank of Benguet in the Philippines. Because the rural bank services a geographically limited area, it uses culturally-appropriate, community-based promotions in marketing its deposit facilities.

Another case looks at the Municipal Savings and Loans Associations in Peru (Cajas Municipales de Ahorro y Crédito or CMAC). Clients of these institutions have had some experience with formal financial services and, because of growing competition, they are increasingly being approached by other institutions such as downscaling banks. Thus, CMACs invest in building long-term relationships with clients by delivering personalized and efficient customer service. For the CMACs, satisfied customers tend to be loyal, and they may even be effective in bringing new clients to the institution.

New ProCredit branch in Banja Luka

The last case discusses the experience of ProCredit Bank in Bosnia and Herzegovina which operates in a market with increasing competition. ProCredit launched a nation-wide marketing campaign in September 2005 to signal their institution’s financial strength among the many commercial banks in Bosnia. This aggressive marketing strategy was meant to respond to more sophisticated market demands, where clients are used to being served by well-developed financial institutions.

Although each institution faced a unique environment, each responded by looking closely at the market when designing its message. Only by understanding potential clients and by building trust with them could the institution hope to compete successfully.

Click on the links below to read how institutions in the Philippines, the Central African Republic and Bosnia generate demand in very different markets:

Case 4: Relational Marketing

Case 3: Building Trust Where Financial Institutions Have Failed (ProCredit Bank, Bosnia and Herzegovina)

Case 2: Segmented Promotion: Balancing Management and Market Responsiveness (Cooperative Bank of Benguet, Philippines)

Case 1: Promotion in a Market New to Banked Savings (Credit Unions in the Central African Republic)