MicroStart: A Guide for Planning, Starting and Managing a Microfinance Programme.
CHAPTER TWO
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D. MARKETING

1. Before You Start
2. Marketing Steps
3. The Marketing Visit
4. The Information Meeting
5. Sample Presentation

With your start-up staff in place, it's time to bring your services to target communities and begin the process of marketing and group formation. In this section, you will become familiar with basic steps in marketing your services and forming Credit Groups.

(1) Before You Start

Before Field Agents make is their first visit to the field, spend time with them to:

(2) Marketing Steps

The following outline describes the basic steps in finding clients, organizing them into Credit Groups, and managing loan activity:



MARKETING WHAT AND HOW? WHO AND WHERE?
Marketing Visit Field Agent visits with community leaders to enlist support and distribute flyers. Field Agent

in the community

Information Meeting Field Agent holds an information meeting in a public place. Field Agent

in the community

GROUP FORMATION
Group Development Meetings Field Agent helps to form groups of 5 to 15 clients. Groups create bylaws and elect officers. Field Agent

in the community

Application Meeting Members complete individual Loan Applications. The Field Agent helps members review and approve loans. Members sign applications. Field Agent

in the community

Initial Site Visits Using the Loan Application as a reference, the Field Agent visits each applicant to verify information. The Field Agent signs loan applications. Field Agent

in the community

Group Certification The Loan Manager visits the group and signs a Credit Group Certification form if the group is ready to borrow. Loan Manager

in the community

LOAN STEPS
Staff Reviews Field Agents and the Loan Manager meet periodically to present group applications to ensure that paperwork is in order. Loan Manager and Field Agents

At the Office

Loan Processing The Loan Manager gives paperwork to the accounting staff for processing. Loan Manager and Bookkeeper

At the Office

Loan Disbursal The Field Agent issues the first group loan to the Group. Field Agent

in the community



(3) The Marketing Visit

The Field Agent visits each target community to research local needs and to enlist the support of community leaders. Building credibility and trust may vary from culture to culture and community to community. Generally, the endorsement of a few leading individuals can greatly influence community acceptance.

Community leaders can be traditional authorities and/or elected officials. They can also be prosperous heads of households, school teachers, religious figures or anyone well regarded and trusted. The Field Agent should establish a dialogue with important community figures so they may:

    Advise the Field Agent on the best time and place to hold meetings;

    Give approval to post announcements and distribute materials;

    Agree to help promote the programme by word of mouth;

    Agree to introduce the Field Agent at the first Information Meeting.

(4) The Information Meeting

The Information Meeting provides a general introduction to the project, its basic benefits, and the rules for joining and borrowing. During the information Meeting, the Field Agent explains the programme- preferably using visual aids if possible. Graphics are used in- stead of written charts if appropriate.

At the close of the meeting, the Field Agent schedules a Group Development Meeting for those who believe they want to join.



Welcome Community Leaders introduce the Field Agent. Field Agent welcomes attendees and asks them to state their names and economic activities. If the Field Agent has time, s/he may ask attendees how they would use a $50 loan. This question promotes lively discussion.
Presentation The Field Agent gives the presentation. S/he should be very familiar with the information prior to the presentation. Several rehearsals with the Loan Manager of Project Director will help.
Invitation The Field Agent asks prospective members to find other gorup members and to come to the next meeting to begin forming a Credit Group.
Scheduling The Field Agent sets the next meeting for a few days later and thanks the community leader and all those attending.


(5) Sample Presentation

Read and modify the sample visual aids below to accurately reflect your programme. Visual aids allow Field Agents to give a uniform presentation. They ensure all pertinent information is presented and is presented consistently to different communities.

Visual aids consist of very large sheets of paper with large type information indicating basic guidelines for your programme (MicroStart). Each box on the following pages is intended to be a separate sheet of paper.

Eight sample visual aids are provided below:

1.

Do you need a loan for your economic activity?

MicroStart can help!

2.

What is MicroStart?

  • MicroStart is a programme that issues loans to individuals who are selfemployed.

  • In order to qualify, the first rule is that potential borrowers must form voluntary groups to guarantee each other's loans.

  • Through MicroStart, a member may borrow money to help his/her small business or self-employed activity.

  • First loans are small. Ail loans must be paid back in six months. Once a loan cycle (six months) is complete, members may take out larger loans in the next loan cycle.

  • Members can continue to borrow larger amounts up to $300. The next chart shows the amount each member may borrow every six months. We call these six month terms a loan cycle.


3.

4.
Some Sample Loan Rules

  • Once members reach the $300 limit they may keep borrowing at that limit.

  • Members may choose not to borrow during a loan cycle but they cannot skip loan maximums. For example a member may borrow $50, choose not borrow during the next cycle and then borrow $100. They cannot skip to $150.

  • Members may borrow less than the loan maximum, but never more.

  • Members may take out only one loan per cycle.

  • Credit Groups must make payments to MicroStart on their loan every two weeks (bi-weekly). On a $100 loan, bi-weekly payments are $12 each, of which $2 is interest and $ 10 is a portion of the principal. At the end of the loan cycle, the loan must be fully repaid.
5.
What are the Requirements to Get a Loan?

  • You must join a Credit Group.

  • A Credit Group is a group of 5 to 15 self-employed people from your community who pursue their own business activi- ties, but provide joint guarantees for each other's loans.

  • Credit Group members apply for loans by completing loan ap- plication forms with the help of the Field Agent.

  • Credit Group members review and approve all loans submitted by members of their own group. No one else approves your group's loans.

  • Any member of a Credit Group may apply for a loan. The group decides whether or not the applicant will receive a loan.

  • After initial loans in a Credit Group are paid back at the end of a loan cycle, group members may apply for new loans.

  • No member of a Credit Group may receive a loan unless all loans in that group have been fully repaid.

  • If one member is behind in his/her payments, other Credit Group members must pay back the loan for him/her. If the member fails to pay his/her group, he/she will not be able to borrow again.
6.
How Do I Form a Credit Group?

A Credit Group takes a few weeks to form;

Your Field Agent will help you with every step;

First, find 5 to 15 members of your community whom you:

  • know well;

  • trust and respect;

  • has an economic activity that earns enough to repay a loan.

Your Field Agent will help your group:

  • decide the frequency of group meetings (weekly or twice a month is recommended);

  • create bylaws for joining and for approving loans;

  • elect group leaders.
7.
How Do I Get a Loan?

  • Each member of the Credit Group completes a loan application and loan appraisal form.

  • The Credit Group votes to approve, reject, or modify the loan.

  • Your Field Agent will make a visit to each of your activities.

  • The Loan Manager of the project will visit your Credit Group and ask some questions. If your Credit Group seems ready, the Loan Manager will certify the Credit Group.

  • Once you are certified, your applications will be processed and you will receive one Credit Group loan in a few days. Your Group Treasurer will then divide the money according to the loan requests of each member in the group.

  • Each member makes a payment at group meetings.
8.
Who Can Join and How?

  • Anyone over the age of 18 can join a Credit Group as long as the members of the group would like her (or him) to join;

  • Only one member per household can be in the same Credit Group;

  • Only one loan per business or economic activity;

  • To begin the process of forming a Credit Group, come to the first Group Development Meeting on_________________.
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