Market Orientation as the Key to Deep Outreach

This paper points towards the lack of 'market orientation' among MFIs contradicting microfinance image as a tool for poverty alleviation.

 The paper states that MFIs have focused on:

• The products they can produce, rather than the products and services that the customers want them to produce;
• Institutional needs rather than customer needs.

The paper details the reasons for shift to market orientation for MFIs:

• Achieving deep outreach and long term financial self sufficiency;
• Serving the poor in a cost effective manner;
• Determining the revenue growth, repayment rates etc. of the MFI.

The paper emphasizes that transition from product orientation to market orientation is necessary if the microfinance industry is to prosper. It suggests:

• Change should not be entrusted to the subordinates;
• Conversion should be constantly assessed;
• Training and development of staff should be frequently done;
• The conversion should be viewed as long term transition process.

The paper concludes that some factors must be taken care of while the alteration takes place:

• It is essential to create an appropriate customer-centered reward system;
• The participation of management should be dynamic, otherwise the evolution to market orientation will fail.