Market Research for Microfinance Institutions to acquire and grow in 2025

How Market Researchers for Microfinance Institutions can acquire growth in 2025

Market Research for microfinance discussion.

Data from precedence research predicts the global microfinance market size to increase from $279.22 billion in 2024 to $310.10 billion in 2025 and is anticipated to reach around $797.11 billion by 2034, poised to grow at a CAGR of 11.06% between 2024 and 2034. This data shows the market size and what is possible, but there is a need for more in-depth insight beyond the numbers to improve marketing strategies. Market Research processes across the globe, especially startups, seldom focus on the numbers, which is considerably an important factor of the research process, but neglect approaching market research from the standpoint of needs, wants, and even behavioural interactions of customers to products and services. In this article, we will look at the right approach to market research and how market research for microfinance can help improve your marketing results in 2025.

The Role of Market Research in Microfinance

Market research is about understanding the market and customer needs, and this covers even to the interest rate a microfinance institute can charge. 

With a  comprehensive research process,  MFIs can gain insights into:

  • Customer preferences: 

This will provide answers to what services they require, the barriers preventing them from accessing financial products.

  • Market segmentation: 

This will give insights into how MFIs can tailor their offers to suit the diverse needs of different demographic segments, such as rural populations, women, or young entrepreneurs.

  • Competitor analysis: 

This will help us understand what other MFIs are launching and identify gaps in the market that can be capitalized on.

  • Economic and social trends:

This will give insights into the economic environment, technological advancements, and sociopolitical factors influencing client behaviour and service adoption.Putting these together gives MFIs a chance to approach the market with more insights into what products and services will fit each audience. Overall, this will improve microfinance institutions’ acquisition and retention.

Gathering Insights: Qualitative vs Quantitative Market Research

Market Research for microfinance types

Market research is generally divided into two broad categories: qualitative and quantitative. Both are essential for obtaining a well-rounded understanding of the market and client needs. We would look intensively into both.                

  • Qualitative Research

Qualitative research methods are combined to help reveal a target audience’s behaviour and perception. This research or data reveals the psychological and emotional drivers behind decision-making. It is a nuanced approach to uncovering how customers feel, think, and behave.

Methods of Qualitative Research for MFIs:

  • Focus Groups

Example: Suppose a Microfinance institute gathers 9-10 customers from different regions or demographic backgrounds. These focus groups discuss their financial habits, challenges in accessing loans, and the role of microfinance in their lives. The information provided will help to understand the emotional barriers preventing underserved populations from accessing financial services and how to tackle the situation from a strategy and content standpoint.

  1. In-depth Interviews

Example: A microfinance institution might conduct one-on-one interviews with small-scale business owners to understand their financial challenges, such as access to credit for purchasing seeds or equipment.

The information will help gather detailed insights into their financial needs and explore customized solutions.

  1. Ethnographic Studies

Example: Microfinance research specialists could spend time in rural communities observing daily life, speaking with community leaders, and understanding how financial decision-making happens at a grassroots level. This will assist in understanding cultural factors influencing financial behaviours (e.g., trust in formal banks vs. informal saving groups) and create services that align with local values.

  • Quantitative Research

Everyone is grossly interested in this aspect of market research. This quantitative approach requires collecting numerical data to identify trends and patterns. To achieve this, tools like surveys, online polls, and data analytics platforms are used to collect a larger sample size.

Methods of Quantitative Research for MFIs:

  1. Surveys

Example: An MFI could send out surveys to its existing clients to assess satisfaction with their services, asking them to rate loan terms, customer support, ease of repayment, and digital banking features. With this, you can collect measurable data to improve service delivery, adjust loan terms, and target new customer segments based on satisfaction levels and feedback.

  1. Customer Demographics and Segmentation

Example: A microfinance institution might collect data on the age, gender, income, and occupation of its customer base to better segment its market. For instance, finding that most clients are young women running small businesses could lead to developing specific products for this segment, such as small business loans with flexible repayment schedules. With this, segmentation and tailored marketing strategies are possible.

  1. Behavioral Data Analysis

Example: An MFI could use transaction data to track how frequently customers access mobile banking, how often they repay loans on time, and which products are most popular. This allows you to measure the effectiveness of current products and services, identify potential cross-selling opportunities (e.g., offering savings accounts to loan clients), and optimize customer retention strategies.

How Market Research Drives Product and Service Innovation

We have established that market research doesn’t just help understand customers; it also directly informs product and service improvement and design. By analyzing market gaps and emerging customer needs, Microfinance institutions can develop aligned financial solutions/ products that cater to specific customer segments.

Imagine this:  Marketing research by a microfinance institution reveals that small-scale farmers in rural areas need access to microinsurance to protect their crops against unpredictable weather patterns.

Through this research, an MFI could develop a customized insurance product designed specifically for these farmers, thus addressing a pressing need and expanding its market share. More importantly, research can highlight areas for service improvement, such as simplifying the loan application process or introducing mobile banking features for clients with limited access to physical branches.

By continuously gathering and acting upon customer feedback, MFIs can remain agile and responsive to their clientele’s needs, creating an environment where innovation thrives.

How can Market Research Improve Customer Retention ?

In the microfinance sector, customer retention is as important as customer acquisition.  The needs of customers evolve over time, and will require that MFIs are closely informed with their client’s evolving needs. To retain customers, market research can help identify:

  • Client satisfaction levels: How well are MFIs meeting customer expectations? Are there any issues that need to be addressed to improve service quality?
  •  
  • Churn analysis: What factors contribute to customer attrition, and how can those be mitigated through tailored marketing and product offerings?
  •  
  • Loyalty drivers: What motivates customers to stay loyal to a particular MFI, and how can these loyalty factors be enhanced through improved customer service or rewards programs?

Online Channels for Market Research that microfinance can use

Online Channel

Tools/Platforms

How It Works

Example

Online Surveys and Polling Platforms

Google Forms, SurveyMonkey, Typeform, Pollfish

Create surveys to gather insights via email, social media, or direct links.

Survey existing clients about their preferences on loan terms or repayment schedules.

Social Media Platforms

Facebook, Instagram, Twitter, LinkedIn Insights

Use social platforms for polls, monitoring conversations, and customer engagement.

Run a poll on Facebook to understand interest in savings programs or loan products.

Website Analytics Tools

Google Analytics, Adobe Analytics, Hotjar

Analyze visitor behavior on websites using analytics tools like heatmaps.

Track how long visitors stay on loan product pages to improve content or UX.

Online Focus Groups

Zoom, Microsoft Teams, Google Meet

Conduct virtual focus groups to gather qualitative insights into customer needs.

Conduct a Zoom discussion with small business owners about financial challenges.

Competitor Analysis Tools

SEMrush, Ahrefs, SimilarWeb

Research competitors’ marketing strategies and online presence for insights.

Use SEMrush to analyze competitors’ keyword strategies and adjust your marketing.

Social Listening Tools

Brandwatch, Hootsuite Insights, Mention

Track and analyze online conversations about your brand or industry.

Monitor conversations on Twitter about microfinance and understand customer concerns.

Online Marketplaces and eCommerce Data

Jumia, Amazon, Konga

Analyze consumer purchasing patterns and preferences from eCommerce sites.

Analyze trends in online sales of financial products to understand customer priorities.

Publicly Available Data and Reports

World Bank, Statista, Pew Research, Google Trends

Access industry reports and data to understand market trends and consumer behaviors.

Use Google Trends to gauge interest in new microfinance products in different regions.

Search Engine Research

Google Trends, AnswerThePublic, Keyword Planner

Analyze search trends to identify what financial services people are looking for.

Use Google Trends to identify the most searched terms related to microfinance in specific areas.

Customer Reviews and Testimonials

Google Reviews, Trustpilot, App Stores

Study customer reviews to identify strengths and weaknesses in your service offering.

Read reviews to identify recurring concerns or positive feedback about your services.

Marketing research makes it easier to run a profiting microfinance institution. The process can be tedious, that is why many microfinance hire Intense to handle market research and strategy. Contact us to get your brand the exposure it needs.

Temitope Ayegebusi
Temitope Ayegebusi

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