Core Competencies 1and 2full 1

PHINMA – ARAULLO UNIVERSITY College of Management and Accountancy
3 Step 2. Coordinate with concerned government office. This step

CORE COMPETENCY 1 requires the Loan Officer to pay a courtesy visit to the government offices and
barangay officials and introduce his or her MFI and its microfinance program.
This unit covers the knowledge, skill and attitudes required in conducting area Step 3. Review Barangay Profile. The second step is the
scanning/mapping, surveying and interviewing. gathering of existing area profile from the barangay or other government
▪Learning Objectives. By the end of the module the students will agencies. This would allow the MFIs to get more accurate data on the target
area's socio-demographic characteristics and economic activities.
understand the following:
Step 3. Conduct Area Survey. In conducting an area survey, the
1. Conduct area scanning / mapping
Loan Officer verifies initial information gathered from government offices and
2. Coordinate with concerned government office
local officials. At this stage, the Loan Officer also identifies potential
3. Review barangay profile
interviewees to the survey.
4. Conduct area survey
Step 4. Conduct Interviews. Community leaders and
5. Conduct interviews microentrepreneurs in the target area are interviewed to gather information
about the area’s peace and order situation, economic activities, informal
lending practices, and business needs.
Step 5. Processing Survey and Interview Results. At this step,
results of the area survey and interview are consolidated.
Step 6. Submit Survey and Interview Results to Branch Manager.
6. Process survey and interview data A written report of the survey and interview results prepared and submitted to
the branch manager.
1.1 SELECTING POTENTIAL AREA FOR
MICROFINANCE OPERATIONS
Microfinance institutions (MFIs) undergo an area selection process before

establishing a new branch or forming additional clusters1 for an existing
branch. Whichever objective the MFI wishes to achieve, this activity should be
part of the business plan of the whole institution.
The specific steps in selecting a potential area for microfinance operations are
briefly presented below:
Step 1. Conduct Area Scanning/Mapping. The first step involves

visiting the potential area to assess its economic activities.
Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 1 | Page of 14

Determining Potential Area The preliminary step in the area selection process requires MFIs to gather
data related to the target area. Data refer to the information on various things
All the activities mentioned above will be done once the potential area has such as socio-demographic characteristics and responses to interviews. These
been identified. In most MFIs, the Program Manager or the Operations Head is are collected in order to establish a factual basis for making decisions.
the one who decides where a new branch will be put up based on the MFI’s
criteria and business plan. The general criteria in selecting potential area for Prior to collecting data, it is important to answer five key questions.
microfinance operations used by most MFIs are the following: 1. What is the purpose of collecting the data?
2. What type of data is needed?
, the number of potential clients should be enough to form a group or 3. Where will this be collected?
cluster of groups based on the standard set by the MFI. Some MFI 4. When will this be collected?
uses ;-;;;;;;;;;;;;;;;;;;;;////////////////////////////////////////////////////////////////////////////////////////////// 5. Who will collect the data?
//////////////////////////////
………………………………………………………………………………………… In the case of the MFIs, data collection is important to determine the viability of
………………………………………………………………………………………… a certain area for microfinance products and services. For example, data on
……………………………………………………..poverty index in identifying economic profile provides the MFI information on the number of potential
potential clients, other MFIs use percentage of poor household (30%-50%). clients in the area.
Distance and accessibility from the office – most MFIs set a radius If the MFI has a research unit or personnel assigned to conduct research, he
of 5-7km. from the branch office for their area of coverage. This is to ensure or she conducts the data gathering; otherwise, a senior officer may initiate it. It
efficiency in terms of time travel of the Loan Officer to and from the branch and is usually the Branch Manager who scans the area and collects preliminary
within centers. data to assess if a barangay is a potential expansion area2.
Transportation – availability of public vehicles for easier
accessibility. The Loan Officer has limited participation in selecting a potential area. The
Existing microeconomic activity – this covers the types and levels of common tasks include identifying the area and gathering secondary
businesses in the area. information.
Existing MFIs and other lending institutions – presence of financial However, it is important for the Loan Officer to understand the activities
institutions operating in the area indicates that the economy in the area is involved in area selection. The succeeding section will discuss how area
progressive. However, the MFI should also analyze the products and services scanning is done.
offered by other financial institutions as the market may be saturated already.
Peace and order – the area should have low incidence of holdups AREA SCANNING
and robbery to ensure the security of the Loan Officer and cash collected.
Presence of banks to deposit collections – there should be a Area scanning involves going around a potential area and assessing its
depository bank to facilitate transactions and minimize security risk. economic activities. It provides the MFI a general picture of the target area –
volume of business, the types of enterprises, the sources of livelihood, and the
Data Collection operating financial institutions.
q mm
Steps in Area Scanning
2. If you would be taking photos of enterprises like store, ask permission first
Step 1. Secure a road map from the owner or staff.
A road map can be bought from a bookstore or obtained from the barangay 3. Ask for the best means of transportation around the area. Some MFIs allow
office of your target area. If you are getting any document from the barangay, the staff to bring his/her own motorcycle, especially in upland areas where
a courtesy call to the barangay officials should be done first. The process on public transportation is limited. It is best coordinate with your branch manager
how this is done will be discussed in the succeeding Learning Element: regarding the policy on doing field work and get his recommendation for this
Coordinate with concerned government offices. particular activity.
4. Keep in mind the criteria set by the MFI and the indicators of a good
Step 2. Walk through the streets microfinance market.
Using the road map, walk though each street. Note the location of the
enterprises in the area and identify the type of businesses present (i.e. retail, Once you are done with the area scanning, consolidate the results.
services, manufacturing, agriculture, etc). Also, take a note of the landmarks
such as bridges, hospitals, schools, churches, and financial institutions Consolidating Results of the Area Scanning/Mapping
operating in the area.
It is important to consolidate the results of your area scanning so that it would
Step 3. Visit the public market be easier for your supervisor to identify the type and level of business activity
Go to the public market and note the number of active stalls. Also, note the in the target area. The Rural Bankers Association of the Philippines-
businesses present according to the types i.e. fresh or processed food, non- Microenterprise Access to Banking Services (RBAP-MABS) has developed a
food, and services. This will provide information on the common types of market assessment form that can be used in presenting the results of area
products traded in the community. Some public markets have a map posted mapping.
outside the office of the market administrator. Taking note of the map would
make it easier for you to identify what types of products are being sold in the The area map gives the MFI a general picture of the economic activities in the
market. area but it does not reflect the preferences and attitude of the
microentrepreneurs towards financial institutions. As such, it is important to
Step 4. Gather data from municipal or barangay office interview potential clients and other members in the community.
You can get other data on the existing enterprises in your target area from the
municipal or barangay office. The learning element on reviewing barangay If an MFI is going to put up a new branch, the head office decides which area it
profile will provide the process on how this is conducted. would be. If the area is an additional cluster to an existing branch, the branch
Some practical tips in area scanning are also discussed below to help you in manager initiates the selection of the area.
carrying-out this activity.
Prior to collecting data, it is important to determine the following:
Practical Tips in Area Scanning Purpose of collecting data;
What data will be collected;
1. When conducting area scan, wear comfortable clothes and footwear since Where will it be gathered;
you will be walking around the area. When will it be collected;
Who will do the actual data collection
The general criteria in selecting potential area for microfinance operation Setting an Appointment
are: The first activity that the Loan Officer should do is to set an appointment with
Enough number of potential clients; the concerned government official upon the instruction of your supervisor.
Distance and accessibility from the office; There are two ways by which an appointment can be set. One way is to call
Existing microeconomic activity; the concerned office or to send a letter to the head of the government unit
Peace and order; and, such as the mayor or barangay captain. This type of letter is called a business
Banks are present to deposit collections. letter.
Doing an ocular visit provides the MFI a general picture of the economic
activities in the target market. A business letter is a formal communication between two or more parties. It
When scanning an area, make sure to note the location of the enterprises strives to be informative, specific, persuasive, direct to the point, and accurate.
and what type it is. This means that the message has to be delivered in the shortest way possible
that can be understood.
Organizations usually have a standard letter format when setting appointments
1.2 PREPARATION FOR COORDINATING with government offices. The Loan Officer only needs to fill up the required
WITH GOVERNMENT OFFICES information such as the details of the addressee and proposed schedule for
the meeting. If there is none, the Branch Manager usually prepares the written
communication. Although it is the Branch Manager who writes the letter, it is
also important that you know the basic rules in writing a business letter.
Do not forget to attach the profile of your organization since you have only
provided a short background in the body of your letter. Providing a more
comprehensive write-up would allow the reader to know more about your
organization. After writing the letter and sending it to the addressee, make
sure that you follow-up the response to your request. Call or visit the person in
making a follow-up.
CONDUCTING A COURTESY CALL
Conducting a courtesy call means that a representative of the organization

In selecting a potential area, the MFI needs to gather information in order to pays a visit to the head of another institution. A courtesy call is one way to
know if the target area satisfies the criteria of the MFI. The data needed can introduce
be obtained from government offices such as the barangay office or municipal a new organization to the local authorities. “The meeting is usually of symbolic
hall. As such, it is important to coordinate with the government offices where value and rarely involves a detailed discussion of issues” (Wikipedia, 2010).
the needed information can be gathered. MFIs through representatives do a courtesy call to a local official, usually the
barangay captain or the Mayor of the area being considered as a possible
market for microfinance services. It is also an opportunity to request It is important that you are well prepared for any meeting. You should be very
permission from the local leaders even before any pre-operation activities in a clear with your agenda so that you will know what to prepare considering the
municipality or barangay, such as conducting area survey and interviewing time allotted to you for the orientation. Once the agenda, time, and venue have
community members. been finalized, start preparing for the meeting.
The Branch Manager takes the lead when conducting a courtesy call. You, as a. Prepare the outline and review the details of the topics to be discussed. As
the Loan Officer, accompany the Branch Manager so you can be introduced mentioned, the purpose of meeting with the barangay council is to orient them
as the one who will be assigned in the area in case you will operate there. It is about your MFI. The topics commonly discussed during the orientation are:
also your opportunity to share other services offered by your MFI which may - Description of MFI
not be mentioned by your Branch Manager. - Vision / Mission and Officers of MFI
During courtesy calls, remember to do the following: - Year MFI was established
1. Dress simply, neatly, and appropriately or wear your office uniform if you - Size of MFI in terms of number of branches and employees
have any. Also wear your company ID which serves as proof that you are a - Strength of MFI (e.g. future plans)
legitimate employee of the organization you are representing. - Products and services offered
2. Extend your hand or give a business card when introduced by your Branch b. Prepare the materials before the orientation. The basic materials to prepare
Manager. are the:
3. Explain clearly the purpose of your visit. - orientation kit or flip chart
4. Thank the barangay chairman as well, even if your Branch Manager has - pens
already said it. - attendance sheet
5. Leave a company brochure or flyer so he or she can learn more about the - brochures
MFI. - audio-visual presentation about your MFI
c. Set up the orientation venue at least 30 minutes before the session. Prepare
MEETING WITH THE BARANGAY COUNCIL the chairs and ensure that there is enough space and seats for the
participants.
Meeting with the barangay council allows the MFI to introduce itself and
promote its products and services. It is, in effect, conducting an orientation Step 2. Welcome the barangay council.
program for the community officials. It is also a way of getting the assistance of
the local leaders in implementing the MFI activities. A good time to meet the Treat your audience like guests and make them feel welcome. Create a good
barangay council is during one of their regular meetings. You can request impression with them by being genuinely enthusiastic and polite.
them to include in their agenda an orientation about your MFI.
a. Greet your audience warmly as you start the session. Use the vernacular to
The Learning Element 3.2 Conduct Orientation of Target Clients presents put them at ease.
some guidelines in orienting target clients which is also applicable when b. Introduce yourself. Mention your first name or preferably by your nickname
meeting with the barangay council. to make the session less formal
c. State the purpose of the gathering. This gives them an idea of what will be
Step 1. Prepare for the orientation the focus of discussion.
courtesy call allows the MFI to introduce their organization to the local
Step 3. Discuss the orientation topics authorities, as well as inform them of the MFIs activities.
Introduce the MFI to your audience to establish the MFI’s credibility and When meeting with the barangay council, set the agenda and
stability. There are basic elements to include in introducing MFIs, namely, the prepares all materials needed. During the meeting, orient the
description of MFI, its vision and mission, the founders and officers, the year it community leaders about the MFI – vision and mission, founders and
was established, its size, and the products and services it offers. Explain your officers, year established, size of the MFI, and products and services.
activity plan and which places you intend to visit. For example, mention that End the orientation by clarifying any questions and thanking the
you will be interviewing market vendors the following week to know their attendees.
attitude towards financial services. Also, state the assistance you need from
them if there is any.
Encourage group discussions in order to get all ideas and questions out. Keep 1.3 REVIEW BARANGAY PROFILE
conversations focused on the topic and answer their questions tactfully.
Conducting an area scanning or mapping provides the MFI a quick look of its
Step 4. End the orientation target area’s economic activities. To validate the results of your area scanning,
Use phrases to send signal that you are about to end your presentation. Ask you need to review the existing profile of the municipality or barangay. This is
the participants if they have questions and make sure that everybody hear another important step in selecting potential area for microfinance operations.
your explanation. If you do not know the answer, politely say so. Then ask Figure 1 shows the process in selecting potential area for microfinance
assistance from your Supervisor or Branch Manager. operations.
After the question-and-answer part, distribute brochures or flyers that contain
details about the products and services of the MFI. Do not forget to thank them Barangay Profile and Secondary Data
for their time.
A barangay profile describes the physical and demographic characteristics,
It is important to take note what has been discussed during the meeting. economic status, and basic services available in the area. More specifically, it
Ensure that the important issues and other details are documented such as describes the geographical location, classification (rural or urban), and general
the date and time, venue, list of attendees. It is not necessary to write the description (mountainous, coastal, etc) of the area. In terms of demographic
whole discussion but only the highlights of the discussion and the major points characteristics, it provides data on the population, number of household,
raised and decisions taken. number of registered voters and community workers. It also identifies the basic
services and the proximity of service institutions (i.e. day care centers, medical
facilities, and financial institutions). It also shows data about the public
There are two ways by which an appointment can be set – either by calling the transportation sector (number of operators and modes of public
office or sending a letter. transportation), sources of income, and types of businesses in the area.
In writing a business letter, the message has to be clear and
accurate. A barangay profile is an example of secondary data. This is considered
Follow-up your addressee’s response to your letter. secondary because the information was gathered by someone else and is
An MFI conducts courtesy call to a local official when his or her town available from the barangay office. Thus, secondary data are information that
is being considered as a possible market for microfinance services. A has already been collected and available for use.
In computer-readable form for electronic distribution
Sources of Secondary Data Local association and NGOs publish detailed information on a certain
industry or sectors. These materials are published in the form of annual
The Barangay office is your primary source of secondary data. For example, a reports, as part of a regular trade journal, or as special reports. In some
Community Profile Study (CPS) and Barangay Development Plan (BDP) can cases, they are available only on request from the association.
be obtained from the barangay hall. The CPS presents the socio-economic Other published sources such as books, dissertations, newspapers,
profile of the barangay while the BDP reflects the five-year development plan magazines, and the like that contain information relevant to the sector or
of the local government with regard to the economic, social, and infrastructure community.
concerns. Individuals outside your organization with expertise on your industry or
activity which may include university professors and researchers,
If the CPS and BDP contain all the information you want to know, there is no government officials associated with the industry, etc
need to get data from other government agencies unless you want to validate
the available information. Otherwise, you have to identify what other data you
need and from which department to get it. The table 1 shows the kind of data COLLECTING SECONDARY DATA
available from different government offices and community organizations.
As mentioned in the previous inputs, secondary data are available and can be
obtained from various sources. Since the data is already existing, data
collection can be done in a short period of time. A day or two is sometimes
enough to collect information especially if the agency has a good record-
keeping system. The challenge with getting secondary data is that some
information may not be readily available or those which are available may be
outdated and do not reflect the current status of the area.
Steps in Gathering Secondary Data
The common ways of getting the social and economic profile (SEP) of a
specific area are visiting government office and doing internet research. Some
provinces and municipalities publish their SEP in the internet which allow for
easy access to information. In most cases, however, you would still have to go
to the government office that collects socio-economic profiles.
From government agencies

1. Determine which institutions conduct research or gathers information about
Aside from government institutions, there are other sources of secondary data. specific socioeconomic profiles.
Database or a collection of numeric data and/or information that may 2. Go to appropriate government agencies/units and ask permission to collect
be the needed data
3. Collect the needed data. 1. Understand the rationale and relevance of the datato be able to determine
From the internet the extent of data collection needed; and,
1. Open a search engine such as Google and Yahoo 2. Identify the sources to be able to gather reliable data and save resources.
2. Type in the search box the name of the town/municipality/barangay
3. A list of websites and short description will appear on your screen. Criteria in Selecting Potential Area
Click on the link of website that might contain the information you need.
Most microfinance institutions follow general criteria in selecting potential
The information generated from the barangay profile and other documents can area for their microfinance operation, regardless of the microfinance
be used to validate the results of the area scanning. While an ocular inspection methodology they implement. Knowing this will help the Loan Officer
provides you a general picture of the area, secondary data gives you more come up with informed recommendation, and help the Branch Manager
accurate statistics and description of a specific barangay. Data on the number make informed decision.
of households, sources of income, number of businesses, and credit sources
which can be found in secondary data are important information to the MFIs. The general criteria in selecting potential area for microfinance operation are:
• Enough number of potential clients - the number of potential clients should

1.4 CONDUCT AREA SURVEY be enough to form a group or cluster of groups with 15-30 members. If the
area where the Loan Officer collects data is for the establishment of a new
The delivery of microfinance products and services starts with area selection, branch, the total number of groups in one cluster depends on the
to either establish a new branch or expand the operations in an existing branch viability model or standard of the MFI
municipality or city. Whichever objective the MFI wishes to achieve, this
activity should be part of the business plan of the whole institution. • Distance and accessibility from the office - the distance should not be more
than 5-7 km from the branch office specifically for ASA methodology
The Branch Manager is the one who initiates the activity and assigns a specific implementers. This is to ensure efficiency in terms of time travel of the Loan
area for Loan Officers to assess. The Loan Officer’s primary responsibility Officer to and from the branch and within centers.
starts with the data collection and then submits his or her initial
recommendations in a report based on the gathered data to the Branch • Existing microeconomic activity - the level of economic activity in the
Manager. area determines the need for microfinance products and services.
• Peace and order - the area should not be high risk to holdups and robbery,
Data Collection to ensure the security of the collected cash and the Loan Officer. This
incidence may be difficult to avoid for MFIs serving the high poverty
Data collection is not a supplementary task of the Loan Officer. It is areas, thus, security measures must be set to manage the risk.
one of his or her main functions. The results of the data gathering affect • Presence of banks to deposit collections - if the potential microfinance area
the microfinance operation of the institution, thus it is important that the is being selected for the establishment of a new branch, there should be banks
Loan Officer conduct it systematically. near the prospective branch office to allow easy transactions and
minimize security risk.
There are two (2) pointers to remember in collecting data:
Procedures in Selecting Potential Area 4. Conduct a competitor’s analysis.
The initial step in selecting potential area is to conduct an area survey. Step 1. Identify Size of Sample Respondents
Scanning the area involves walking around the central business district to
assess the economic activities. While doing so, the Loan Officer can develop In conducting the area survey, the Loan Officer need not go to all the
an area map, and plot the establishments and major institutions like schools, microentrepreneurs in the area, but rather get samples. A sample is any
church, and barangay hall. part of the population of individuals from whom the Loan Officer gathers
information.
The area map could become the basis for selecting potential respondents
during the area survey. The Loan Officer selects randomly a sample of survey informants from
the total population in the area. He or she must remember that a genuine area
The Loan Officer validates his or her observations made during the survey follows a scientific process, and does not involve only one person.
area scanning alongside other documents about the area to come up with Otherwise, the result will not be reliable and may have a negative effect on the
more information that is reliable. microfinance operations.
This initial information provides a general profile of the area, but does There are generally two ways to get the sample size: one is through a random
not reflect yet the behavior of the microentrepreneurs toward financial sampling, the other one is through a non-random sampling.
services. Thus, the next steps in the process of selecting potential area are
equally important. The focus of the next sections will be the discussion on how In a random sampling, the MFI must determine a significant sample size for its
to conduct area survey. We will discuss the other steps in a separate learning respondents. For example, the sample size is 100. To obtain a sample
element. size of 100 from a population of 1,500 microenterprises, the Loan Officer
just need to select 100 out of the total entrepreneurs. One of the ways to
CONDUCTING AREA SURVEY do this is to select from the area map earlier developed. The Loan Officer
assigns each selected survey respondent with a number for easy
Once the Loan Officer has established the general profile and the area map of identification. He or she can further divide the sample like pre-allocating a
the potential area for microfinance operation, he or she is now ready to number of respondents from different population. Figure 2 illustrates this
conduct area survey. A survey is a method used to gather primary data to process.
come up with an estimate of the size of potential market.
Steps in Conducting Area Survey
For selecting a potential area, the Loan Officer has four (4) steps to follow in
conducting survey.
1. Identify size of sample respondents;
2. Contact the community leaders;
3. Assess the general characteristics of the area; and,
or she then introduces the MFI’s purpose, key officers, location, and the
The other way is non-random sampling or systematic sampling method. In this purpose of the visit.
process, the Loan Officer gets every nth individual in the population list The Loan Officer must also provide all the necessary information about
to be included in the survey. To know the interval (nth),the Loan Officer has to the MFI to the community leaders, as they could be the best medium to
divide the total population by the desired sample size, then select from the list market the products and services to their constituents.
until he or she has determined the desired number of respondents. The
sample in Figure 3 illustrates this process. Step 3. Assess the General Characteristics of the Area
Once the community leaders allowed the Loan Officer to conduct the
area survey, he or she can do the initial ocular survey of the general
characteristics of the area by going around the area where there is high
economic activity.
The specific aspects to observe are the following:
• Is the community neat and clean?

• Are the main roads paved?
• Are businesses located in permanent structure?
• How close are people living to each other?
Step 2. Contact the Community Leaders
This initial observation will give the Loan Officer an idea of the behavior of
After identifying the size of the respondents, it is time to talk with the the people in the community, the means to transport goods and services, and
community leaders. Before the Loan Officer conducts area survey, the allow him or her to calculate the flow of economic activities.
first groups that he or she should visit are the barangay officials, as a sign of
courtesy. The other community leaders are those coming from the Step 4. Conduct a Competitors’
religious groups, socio-civic groups, business groups, and others. Analysis
It is important to conduct a
Leaders in the community can help identify the appropriate respondents. competitors’ analysis to
Although the Loan Officer has to be very clear with the criteria for determine how many MFIs are
choosing respondents, otherwise they may identify those who could not operating in the area and estimate
provide significant information. the size of the potential clients who
will avail of the products and
The Loan Officer should introduce himself or herself first and present a services.
business card, the MFI’s brochure, or flyer to the community leaders. This
creates an atmosphere of professionalism and trust to the institution. He The Loan Officer can get the
information from the community
leaders or by asking people in the community about the profile of financial In the selection of potential area for microfinance operation, the Loan
service providers in the area. Officer’s primary involvement is data gathering. The interview is conducted
after the area survey.
In analyzing the competition, the Loan Officer should focus on the main
features of their products and services. Aside from secondary data from public sources, the Loan Officer
conducts interviews with individuals or groups which allows him or her to
The following questions can guide the Loan Officer: validate the data gathered from other sources and make informed
1. Interest rate and service charge recommendation to the Branch Manager if the area passed the criteria of the
Is the interest rate of competing institutions lower, higher, or same as your MFI.
MFI?
Do the competitors pre-deduct the interest from loans? Through interviews with people at various levels inthe community, the Loan
What are the additional charges by your competitors? Officer, is able to:
Are their service charges higher, lower, or same as your MFI? • officially introduce his or her organization and loan programs to local leaders
2. Term and the potential clients;
Is the loan term offering of the competitors shorter or longer? • enlist the support of the community by being partners in the cause of helping
3. Manner of delivery the poor in the area; and,
Does the competition release fund at the location of the clients, or the clients • determine that applicants to the microfinance programs are actually what the
go to the MFI? MFI is targetting to help.
4. Services offered
What services do competitors offer? Who Will be Interviewed?
Do the competitors offer their services for free orfor a fee?
Interview with the following individuals or groups are important to make an
informed decision about the potential area for microfinance operation. These
1.5 THE BASICS OF CONDUCTING INTERVIEWS include:
a) Local Government Officials
After Learning on the The Loan Officer primarily works in the smallest unit of the local
importance of conducting area government which is the barangay. The highest form of local government unit
survey as part of the process in is the province, followed by the cities/municipalities, then the barangay.
selecting potential area for Opening communications with barangay officials (i.e. Barangay Captain,
microfinance operations, it is “Kagawad” or Council Leaders of different political organizations in the
important that the Loan Officer barangay,) is a way of knowing more about the state of the community,
understands the next step of the economic activities, peace and order situation, population, political
process which is conducting setting, and other data. Details were provided on the previous Module
interviews. on Conduct Area Survey.
Why Conduct Interviews?

Interviews with local officials in higher elective positions i.e. Data Element Source
municipal/town/city mayors and provincial governors are undertaken by MFI Population National Statistics Office
area management in the opening of new branches. No. of households National Statistics Office
No. of registered enterprises Municipal Treasurer’s Office Barangay
b) Organized groups in the village/community Major sources of income Municipal Planning & Development Office
Choose groups which have high concentrations of potential clients. d) Applicants to the Program/Potential Clients
Encourage women and men who are actively involved in income generating
activities to participate in the group interview. Microentrepreneurs who have It is important to describe the basic characteristics and needs of the
been involved in their microbusinesses for a long time know how to wisely group of target clients. Some microfinance organizations, after a formal
use resources such as loans and savings and can evaluate the risk of meeting with the barangay officials and after a formal introduction of the loan
extending loans to future clients who are from their area. Organized groups program to the community, conducts interview with potential clients.
are also knowledgeable of the major economic activities, informal sector Home visitations are already undertaken.
practices, information of existing microfinance
competitors, including how much is being charge for services, value Information that the Loan Officer gather during the interview includes:
added services and other lending activities. They can provide data on
where the barangays where economically active but poor community 1. Income data:
members can be found. a. Main source of income
Organized groups include: b. Estimated monthly income of the family
- Women’s Club; Home Owners Association; c. Estimated monthly family expenses
- Market Vendor’s Association (no. of public market stall holders, etc.) d. Net earnings of the family
- Public Market Administrators 2. Experience in Microenterprise - previous involvement in small income
- Tricycle Owners and Drivers Associations (# of transport generating activities
operators/units) 3. Existing Loans with other institutions/informal money lenders
- Groups of local entrepreneurs of industries where the community 4. Family Data: number of family members in the household
is known (i.e. group of mat weavers, basket-makers, clay pot 5. Number of children of school age: how many are studying
makers, etc.) 6. Capitalization needs for existing/future business.
- Religious leaders 7. Asset data: the material things does the potential client have such as
appliances, goods, furniture, business tools/equipment, etc.
c) Local Government Units/Departments
Secondary information are provided by the following organizations. Data will help the loan officer determine the kind of assistance needed by the
Nevertheless an interview with key people from the organization can provide potential client in their income-generating activities. The data is also useful
additional information which can go beyond the needed data as indicated in determining if the financial services will be appropriate to the potential
below. clients.

PREPARING FOR THE INTERVIEW What to Bring on the Day of the Interview
1. Bring money, identification card, company uniform, date book, journal,
The Loan Officer must make sure that all his or her information is complete pens, and plastic envelopes for documents, and celllular phone
and that he or she has the latest information. The following should be done as 2. Photocopy of the MFI’s Securities and Exchange Commission’s (SEC)
part of the preparation for the interview: Registration. This is proof that the Loan Officer belongs to a legal and credible
organization
Before the Interview 3. Coordination letter signed by the Branch Manager
1. The Loan Officer must coordinate with the local executives of the 4. Brochures, flyers, annual reports
local government units covering the area. In this case, it will be the 5. Questionnaire for the potential client
Barangay Captain, members of the council and leaders of different 6. Area survey checklist
political organizations in the barangay. 7. List of competitors as provided from the Municipal/City Treasurer’s Office
For local agencies or organized groups in the community, the head of 8. Area Profile for reference
the group should also be notified.
● Interview skills are improved by applying the following techniques:
2. An official letter signed by the Branch Manager must be given a few
days before the interview. It shall contain the date, time and purpose of the ability to summarize data, paraphrase or putting into your own words
visit to the interviewee’s office. Be specific of the data that are needed to give what the interviewee said, and questioning/probing skills.
those to be interviewed time to prepare any requested documents related to ● The quality of answers/accuracy is dependent also on how the
the meeting.
Loan Officer handles the interview. Courtesy, impartiality, being
presentable and professionalism are important.
3. For visits with the Municipal Hall or City Hall, inform them of the
interview/survey to be conducted in the area. State in your letter about your
request for the following data:
1.6 PROCESS SURVEY AND INTERVIEW DATA
● Population per barangay , No. of households , No. of registered
businesses, No. of establishments, No. of banks and other MFIs ,
Information on transport sector , Five-year plan, Map
4. Use other networks such as friends, families, barangays, and small
businesses that the Loan Officer were in contact with daily in the community.
5. Prepare a list of questions to make the interview flow easier. If there

is a survey/interview format, be familiar with the questions.
6. Do mock interviews. Practice with 1 or 2 other people to get a feel
of the exercise.

After conducting the interview, what do you do with the information you When assigning codes, you should start with the smallest single digit number
gathered? How can you consolidate the data to make it more meaningful? except zero and ensure that the coding is consistent.
How do you analyze the information that you got from your survey? A response item is a possible answer to the question such as Male or Female
for the question on Sex. Once you have finished coding your questionnaire,
PROCESSING SURVEY RESULTS you can start entering data into the database.
Data processing is the stage between data collection and data analysis. It
involves classification and summarizing of data for analysis. There are several Step 3. Tabulating the responses.
steps involved in data processing. Tabulation can be done manually or by using a computer. Manual encoding is
suitable when the sample size is small, while electronic tabulation is useful for
Step 1. Data Screening. large and complex studies. Regardless of which method is done, a tabulation
It is important to check the questionnaire’s completeness and accuracy. Doing form should be created where the responses will be inputted. MS Excel or
this right away will allow you to go back to the respondent and clarify any OpenOffice can be used for tabulating the result of the survey.
problems or errors. There are several questions you should ask as part of this
initial data screening: It is important that the data is recorded accurately and systematically. Leahy
If the survey is self-administered, are the responses legible or (2004) provided some guidelines for some of the most common problems in
readable? entering data into the tabulation sheet.
Are all important questions answered? If the question was unanswered, leave the cell blank.
Are the responses complete? Are all parts of the questionnaire If there are two responses for a question that only requires one, treat
answered? the
Are all relevant contextual information included (e.g., date, time, question as unanswered.
place, If the circle falls between two response items, treat the question as
interviewer)? unanswered if you are not sure of the response.
If the open-ended response is incomplete, enter the given data.
Questionnaires that have incomplete answers should be separated from those
that were answered completely. For example, if the form has 2 parts – ANALYZING AND PRESENTING DATA
awareness of the MFI and business information, and the clients only answered
1 of the 2 parts, the results of the survey is insignificant. As such, those partial Data Processing
results should be discarded to clean the data pool, unless you can get in touch
again with your respondent to complete the form. There are questionnaires, The kind of analysis that will be done is dependent upon the information that
however, that are designed in such a way that the interviewee will have to skip you want to generate. The most basic way to analyze survey results is through
certain questions because of his/her answer in one item. If this is the case, frequency counts and percentages. A frequency count refers to the total
then the questionnaire is still valid. number of responses per question. Excel or Calc can automatically generate
the total number of responses for each question and its corresponding
Step 2. Coding the questionnaire. percentage once you input the necessary formula.
Coding means assigning a corresponding number to each response item.
Ordinal scales can also be used if you want to rank the responses such as
“what are the top three reasons why microentrepreneurs apply for a loan”.
Presenting Survey Results

Results can also be presented in a narrative format. When doing so, describe
Tables and graphs can be used in presenting survey results. the highest proportions in the table or chart first. Using the table in Figure 3 as
A frequency table can be made to show the number of responses per question an example, you can write the results as “70% of the respondents answered
and its corresponding percentage. For questions with more than 10 different yes while 30% answered no”.
responses like age and years in the business, the responses can be grouped Regardless of how the data is presented, it is important that the results are
in ranges such as below 10, 10-19, 20-29, and so forth. Figure 3 shows a presented clearly and completely. Learning Element 1.7 Submit Survey and
sample of frequency table. Interview Report will guide you on how to make a market research report
which reflects the results of your area scanning, data gathering, and
interviews.
Questionnaires should be checked for its completeness and accuracy right

after conducting the interview
Data gathered through survey and interview should be summarized
for
analysis.
The kind of analysis that will be done is dependent on the
information that you
want to get from the questionnaire. The most basic way is to use
A pie chart or bar graph can be used to synthesize findings and emphasize frequency
relationships between variables. When using a graph, make sure that it is counts and percentages.
clearly labeled, the values are reflected, a legend is specified, and the axes in Tables, graphs, and narrative report can be used in presenting data.
the bar graph are labeled. Figure 4 shows a sample of pie chart.
1.6 SUBMIT SURVEY AND INTERVIEW REPORT
TO BRANCH MANAGER
1. The Area Survey Report or Market Research Report is a consolidation

of the important details about a potential area for microfinance
operations. The Loan Officer should be reminded of the following reasons why
a survey is conducted:
• To have measurable data on the financial services needed;

• Assist in identifying opportunities for microenterprises;
• Use data to design microfinance products/services; and,
• Estimate number of prospective clients/size of potential market for
Microfinance Institution.
2. Although formats among Microfinance Institutions may vary, there are
general data that are usually included in the report. The Loan Officer prepares
the report for submission to the Branch Manager after data gathering and CORE COMPETENCY 2
interviews with concerned individuals.
This unit covers the basic knowledge, skill and attitudes required in the promotion and
3. Primary data are those gathered and prepared by the Loan Officer marketing of MFI’s products and services.
himself or herself after going through his or her own survey while secondary
data are those that are based on previous documents prepared by other ▪Learning Objectives. By the end of the module the students will
people. understand the following:
1. Introduce loan products and services
4. A Survey Report can be divided into the following main headings: 2. Conduct orientation and briefings on microfinance products and services
a. Profile of the Area, Market size, Market risks, 3. Facilitate/Coordinate microfinance training program
Recommendation/Conclusion
4. Assist clients on promoting their products
5. Administer survey on enhancement of MFI products and services
5. The recommendations made by the Loan Officer are important in the
decision making process by the Branch Manager. It can affect the overall
2.1 INTRODUCE LOAN PRODUCT AND SERVICES
performance of the branch in terms of reaching its targets.
Why do MFIs Need to Market its Products?

Microfinance is a very dynamic sector. Institutions involved in microfinance - What are the features of the loan, savings or insurance product of the MFI
face new market challenges that include fierce competition, demand for he or she is representing?
diversified products and selective customers. These result to high client - What does the name stand for?
dropout rates and low recruitment rates - How the MFI delivers its products and services?
- Is there a special training before the client can avail of the product?
To be able to recruit more clients, and reduce the dropout rate, MFIs - Is there a penalty if the clients fail to repay?
recognizes the need to strengthen their operations through marketing
techniques used in other commercial businesses. Price is the cost of availing the product and services. For microfinance, price is
the interest rate and charges passed on to clients.
Why Should Loan Officers do the Marketing?
Place is the location and channels of accessing the products and services.
In a market-oriented business, like microfinance, operations people like The Loan Officer has to make clear to the clients the place of
the Loan Officers are also the marketing people since they are the ones transaction, in terms of release, collection, and center meeting.
directly interacting, observing, and assessing clients. The daily tasks of Loan
Officers allow them to get feedback on the features of the products and Promotion is the means of communicating the value of the products and
observe the behavior of the clients towards their products and services, even services to the clients.
the products of competitors.
How Marketing is Done?
What Will Make Marketing Effective?
The marketing process that a Loan Officer uses is similar to the
The best way to make things successful is to prepare a marketing plan. The marketing steps for any other product or services of the MFI. The Loan
Loan Officer can design his or her own marketing plan, adopted from the Officer conducts the marketing and promotions after the management has
marketing plan of the whole branch. A good marketing plan considers the selected and approved the area for microfinance operation. Figure 1 below
marketing mix or the “set of marketing tools used to pursue the marketing summarizes the process of marketing microfinance products and services.
objectives in the target market.”
In pursuing the marketing objectives of the branch, the Loan Officer

must understand the four P’s of marketing, namely:
1. Product
2. Price
3. Place
4. Promotion
Product is the actual products and services that the MFI offers to its clients.
In the marketing plan, the Loan Officer has to prepare to answer the
following questions:
Identifying potential clients
Before the Loan Officer could understand the nature and behavior of the
client, he or she has to establish first who, his or her clients are. From the
result of the area survey and interview, the Loan Officer has to segment his or
her target market.
Market segmentation is a process of dividing the target market into
smaller groups using different variables like demographics, needs and wants,
benefits expected and behavior.
Marketing Procedures
Market segmentation helps the Loan Officer understand the nature of
Step 1. Determining the Nature and Behavior of Microfinance Clients their potential clients, the types, and features of product offerings suited to
them, and the marketing strategies to be developed.
To be able to recruit appropriate clients, the Loan Officer conducts an in-depth
analysis of the nature and behavior of microfinance clients. Understanding the Some MFIs have standard factors in segmenting their clients. It is important for
nature and behavior of clients also allows the MFI to modify its products and the Loan Officer to understand the rationale for using these standard factors.
services, and maintain client loyalty. The Loan Officer’s responsibility is to Some of the useful factors for market segmentation in microfinance are:
share the data gathered from his or her observations to the Branch Manager. 1. Financial Service Needs or Preferences - example savings, money
transfer, size of loan
2. Demographics - potential clients’ characteristics such as age, gender, used to bulk of paperwork as part of the requirements to avail of the
civil status, educational attainment, family size, religion, language spoken, etc. products and services. The lesser the paper work means the faster they
3. Socio-economic data - sources of income, living conditions, including health can avail of the products and services;
conditions of the household members 3. Clients look for variety of products and additional services. They are no
4. Attitude toward a product or institution – positive, indifferent, negative longer satisfied with single and simple product;
To understand the implication of these factors to the MFI, Table 1 4. Some experienced clients, make decision based on price; and,
below shows a sample classification using the age, gender, and socio- 5. Clients who have lower level of education require and value
economic data developed by World Women Banking: assistance in filling-out the application form, information gathering, and
transaction processes. They also value additional services like insurance,
house repair loan, education, and learning, particularly those services that
can improve their business.
At the end of the information gathering, the Loan Officer summarizes the data,
writes analysis and initial recommendations, and submits to the Branch
Manager.
Knowing Client’s Behavior
Result of studies show that microfinance clients’ preferences and

behavior towards products and services change due to the evolving trends in
the microfinance industry. With so many institutions providing microfinance
products and services, the clients are presented with so many choices. Some
of the behaviors of clients are:
1. Clients can no longer wait for weeks to be able to get their borrowed
money;
2. Most clients prefer simple and less paper works, since they often operate
their businesses without formal permit and documentation. They are not
Step 2 – Developing Marketing Strategies 3. Communicating Products through the Local Government Units
Some MFIs promote their products through the Local Government Units either
Marketing strategies are what the institution will do to achieve its objectives. through a formal orientation or through posting of promotional and
marketing materials on the Bulletin Board at the Municipal/City/Barangay
In simple terms, these are the ways to connect your product with the market. Hall. In any which way, the Loan Officer has to follow the following protocols:
Below are basic strategies that a Loan Officer can develop for his or her target
community. 4. Client Activities
Most MFIs that implement group methodology conducts group activities with
1. Promotional and Marketing Materials their clients. In these activities, best clients and best groups are recognized.
In some MFIs, the Head Office develops the promotional materials, which in
most cases are written in Tagalog or English language. Because of this, There are presentations, contests that show clients’ talents, others have
the Loan Officer still modifies the promotional materials to fit the language and booth to display products of clients. Often these activities are open to
even culture of the target community. the public, thus, other non-members are encouraged to join the MFI upon
seeing the recognition, and the social activities enjoyed members of the MFI.
The World Women Banking listed some tips in developing promotional These activities serve as an indirect way of promoting and marketing the MFI
materials for loan products: in the community.
• Keep the message simple- remember that people have short attention Step 3 – Selecting Appropriate Methods and Tools for Marketing
span, particularly your target audiences who are busy not only in business but
often with household chores as well. Sometimes we buy things because the product endorser is our favorite star or
• Emotional versus rational benefits- when creating promotional and more often because we believe in what the product endorser say.
marketing materials use messages and images that connect with the
customers on an emotional level. Think of the time you buy clothes, do These are the combination of marketing methods and tools. There are two
you buy it because of the price or because it looks good on you? points to consider when selecting appropriate marketing methods and tools:
• Timing the promotions- aim to reach the target clients at least three
times with the same message. You have to remember that different tools or The message - what does the Loan Officer need to say to be able to attract
methods require different timing as to when to use it. We will discuss this in the prospective clients to join the MFI
detail in the next input. The medium - a storage and/or transmission tools used to store and
deliver information or data to reach the target clients of the MFI
2. Linkaging and Networking
Here are some of the common methods used by MFIs to market loan
Most MFIs are members of networks or local councils. Through the products:
conferences sponsored by these councils, MFIs are able to share the features 1. Field Promotion
of their products and services. With this, potential clients have a chance to In microfinance, this is the most popular marketing method. Loan
inquire about the products of the MFI, and even interview the participating Officers do promotions by going door-to-door to residential areas or conduct
clients about the impact of the MFI to their business. an orientation in a multi-purpose hall in the community or at the center house,
if there is one in the community. The Loan Officer does four stages in - Thanks the prospective client/s for their time and says goodbye
effective field promotion.
Stage 4. Follow-up.
Stage 1. Presentation. - Takes the name of interested prospective clients
- The Loan Officer should be well-dressed with his or her ID visible. - Calls or visit the interested prospective clients within one week
- Maintains eye contact with the client, smiles and introduces 2. Word of Mouth Marketing
himself or In microfinance, this is the most powerful method, as most if not all MFIs rely
herself. on this because no cost is needed to do this. However, the danger of this
- Introduces the name and gives the standard description of the marketing mode is that prospective clients are free to say anything about the
MFI. For example, like ABS CBN Bayan, “We do not just finance, we institution, some maybe correct others may be contrary to the product features
also educate of the MFI.
and develop your business.”
3. Brochures
Stage 2. Understanding. The Loan Officer distributes brochures during field promotion or orientation
- For home-based promotions, asks the prospective client if they have and encourages prospective clients to know more about the MFI’s
their own business. products and services by reading it. However, poorly designed brochures
may damage the credibility of the MFI.
- Marketplace-promotions, asks prospective clients if they would
like to
grow their business, need to buy more inventories, invest in Step 4.Communicating the Value of the Product through Orientation
equipment, etc.
- Listens intently to what the client is saying. Client Orientation
Stage 3. Promotion. Client Orientation is to inform clients about the features of the product. For
- Explains the appropriate product that fits the needs and those implementing the word of mouth strategy in marketing, it is also the
situation of the prospective client (if MFI has different loan products) opportunity to clarify misconceptions about the product and the MFI itself.
- Explains the benefits of the loan products such as fast It also serves as a venue to communicate the purpose of the MFI providing
disbursement, microfinance.
minimal paper or documentary requirements
- Explains the benefits of being a member of the MFI Procedures in Client Orientation
- Provides information and answers any questions about the MFI’s
products 1. Preparation for the Orientation.
and services. Gives out information sheet or application forms a. Any orientation starts with the preparation of logistics, particularly the
- Encourages the prospective client to come to the branch with visual aid materials needed for the presentation. The Loan Officer should use
their the promotional materials developed by the marketing team. If no
documents material is available, the Loan Officer should collaborate with other Loan
Officers and the Branch Manager to develop a standard guide in conducting 4. Stating the Purpose of the Orientation.
orientation. a. The Loan Officer should state that the orientation is conducted to allow the
participants to know more about the MFI they represent and the products that
b. The materials to be prepared include: in has developed to address the financial needs of the
- Flipchart or Manila paper microentrepreneurs like the participants present in the session.
- Client orientation session book b. In stating the purpose, the Loan Officer should use simple language.
- Application Form
- Attendance Sheet 5. Introduction of the Institution.
- Overhead projector, if venue has power supply a. Mission and Vision- Introduction of the institution starts with the mission
and vision of the institution to give prospective clients an idea of the
c. The Loan Officer must also see to it that he or she is properly dressed and purpose of the institution they will be joining. However, when presenting,
wears his or her official ID. This adds up to the credibility of the Loan the Loan Officer should not read the visual aid but rather explain the
Officer as well as the MFI. content.
b. Key officers in the institution- this adds to the credibility of the MFI.
2. Set venue and time. c. Name and Location of branches- this makes the prospective clients know
a. The orientation should be conducted on a specific time and day of the location of offices where they can transact business. This adds to the trust
the week. Oftentimes, it is conducted in the afternoon when there are minimal of the clients toward the MFI.
business transactions or activities.
6. Presenting the Loan Products.
b. The Loan Officer should make sure that the session begins on time. It is a. When introducing the types of loans, or any other products it is better to
here that the clients can already observe the valueof discipline. write it in a matrix or a chart, reflecting the features for each product in order
for clients to visualize the discussion. An example of a promotion matrix is
3. Introduction of the Participants. illustrated below:
a. The purpose of the introduction of the participants is to set the tone of the
whole orientation session. It helps participants to relax and be comfortable in
asking questions later on related to the orientation. The orientation is not a
formal training session, thus, “it should be conducted as informally as possible,
without losing sight of the objectives.”
b. The session should start with the Loan Officer introducing himself or
herself. If there is any other member of the MFI present in the session,
they should also introduce themselves.
c. Then the potential clients should be requested to introduce
themselves, stating their name, address, and type of business.

9. MFI loan process.
a. The Loan Officer should also share the loan process to give clients an idea
what happens next when they submit their loan application form.
10. Ending the Session.

a. The Loan Officer should end the orientation, emphasizing the
advantages of the loan product/s over others, particularly 5-6 loans.
b. Do not forget to thank the clients, and share the next steps.
In some MFIs, the Loan Officer does not discuss the penalties for
nonpayment of loans during the product orientation so as not to
discourage potential clients. They only discuss this once the clients have
7. Client Eligibility Criteria. already understood the principles of the institution and the rationale of the loan
product.
a. The Loan Officer then discusses the qualification of the clients. The
Loan Officer must be careful that discussions will revolve only around the 2.2 PROMOTE SAVINGS AND MICROINSURANCE
policies and processes of the MFI.
UNDERSTANDING SAVINGS IN MICROFINANCE
8. Application Requirement.
a. The Loan Officer enumerates the Loan Application requirements, For microentrepreneurs, access to savings facility is important. For the MFI, it
which often includes: is the cheapest source of fund. Even before microfinance, the poor had
- Loan Application, duly signed by the applicant proven to save, through cash either at home, or through participation in
- Photos informal savings program.
- Any valid ID
- Promissory note Most of them did not have access to formal savings institution and
b. The Loan Officer also explains how the loan application form should be invested their cash to other types of assets like appliances or jewelries.
filled-out. It is better to have an enlarged format of loan application to enable
clients to visualize the discussion. Figure 1 in the next page shows a sample Why do People Save?
application form.
c. For MFIs, the promotional activity or orientation is the best opportunity People save for different reasons. Most people save because of
to distribute application forms. Thus, the Loan Officers distribute the expected future events. Others save anticipating there might be
application forms and set another date for another meeting to collect the unexpected future events, which they will need cash, and easily recover from
form and the requirements. what was lost. Some save because they want to invest or build their assets

In this context savings is defined as “money put aside by an individual Savings Products for Microfinance
or household for use in the future. A key to good money management,
savings help individuals and households manage risk, deal with In microfinance, savings could be compulsory or voluntary. According to
emergencies, smooth income, build assets, and meet financial goals. People World Women Banking, “Compulsory savings have been introduced as a
save by putting money aside when it comes in and by spending less when it condition for obtaining a loan and are designed to ensure that clients are
goes out.” able to meet their repayments. In contrast, voluntary savings programs do not
assume that clients need to be told how to save. Instead, they assume that
Despite the above reasons, people still find it hard to save. when clients are offered a range of quality savings products that cater to their
needs they will choose to save.”
Why is it Difficult to Save?
It takes a lot of discipline to be able to save money. It is hard to resist the 1. Compulsory Savings
temptation of spending. The main principles in savings are: Compulsory savings are sometimes called capital build up (CBU) or
1. Spend less than what you earn. fixed savings. The amount is usually a certain percentage of the loan
2. Save everyday or every week. amount and is deducted from the loan amount upon disbursement. Others
require a fixed amount given together with the weekly repayment. In most
What are the Types of Institutions that Offer Savings? MFIs, the amount saved can only be withdrawn upon resignation of the client.
Some MFIs provide interest on CBU,
People can save in formal, semi-formal or informal type of institution. Below which could also be withdrawn upon resignation from membership. The chart
are the different types of institutions that offer savings: below illustrates how MFIs computes CBU.

In the above illustration, the Loan Officer should emphasize the importance of In promoting the savings product, the following step must be observed:
retaining the membership to be able to accumulate savings, rather than
the amount saved. Step 1. Introduction
When introducing the savings product, do not start with the product
2. Voluntary Savings itself. Instead, ask clients if they have savings. Then present the benefits of
This does not have fixed amount, but depends on the capacity of the client. savings, using the input on why people save. End this part saying that there
However, most MFIs set a minimum amount to save because it is too costly to are different life events, which require money, and savings is the best
process small savings and withdrawals. Subsequently, some MFIs require that option to prepare people for these events.
once client has pledge an amount for voluntary savings, he or she may not
decrease or increase the amount for the whole cycle. The chart below Step 2. Presenting the Different Savings Products
shows a sample computation of voluntary savings. Prepare a matrix showing the different savings products the MFI offers,
minimum savings required, weekly savings, interest earned, guidelines for
withdrawal. The sample presented in the previous input could be used as
guide in writing the visual aid materials for presenting savings products.
Step 3. Presenting Benefits of Saving with your MFI

To persuade clients to save, the Loan Officer focuses the discussion on
the benefits of savings in an institution like MFI. Share these benefits below:
a. Convenience- emphasize that savings will be collected together with

the repayment or the group treasurer will collect savings and deposit to
the bank, in case the MFI uses bank deposit scheme in collecting repayment
and savings.
b. Interest- emphasize how much clients can save at the end of the year out
of the interest earned by their savings.
c. Safety and security – emphasize that credibility of the MFI, its purpose,
length of service, location. Show the passbook to ensure clients that they
can track their savings.
Step 4. Give tips on developing Savings Plan

To encourage potential clients to save, provide the idea on how to set
their own savings plan. The guide below could be presented to clients:

1. Set savings goals. 2. Benefit Amount - the amount of the claim that becomes payable
2. Figure out how much you need to save over upon the occurrence of the insured event, it could either be a
what period of time to meet your savings goals. fixed amount or the balance of the loan. The risk pooling
Set a savings target. mechanism makes it possible for the benefit amount to be much
3. Figure out how much you are earning over greater than an individual’s premium payments.
this period of time, the regularity (or irregularity)
of your earnings, and how much you can expect 3. Beneficiary - the party that receives the benefit amount if the
to save on a regular basis. insured event occurs.
4. Identify which expense you can cut back (for 4. Term of cover - the period within which the insuredevent must occur for
example, video rental, cigarettes, or tea breaks) a claim to become payable.
and reallocate this amount to your savings.
5. Keep track of your savings. Check your
passbook or other sources of information on your Why Microfinance Institutions Provide Insurance?
savings.
It is important that the Loan Officer understands why microinsurance is
offered as a financial service. MFIs have several reasons for offering
UNDERSTANDING MICROINSURANCE microinsurance.
As mentioned in the promoting loan products and other services 1. Customer loyalty
learning element, the growth in microfinance industry increased the Many MFIs realize that they need to offer a variety of products to
demand for more innovative products and services. One product equally enhance client retention, so that even when clients do not want a loan
important to savings and credit is microinsurance. they may still appreciate a savings account, a wire transfer service,
or insurance protection.
The term “insure” is used to mean protection from risk due to unpredictable 2. Product profitability
events. “Insurance reimburses an individual for some or all of financial loss A diverse product menu allows cross-selling opportunities and spreads the
that is linked to unpredictable event or risk.” Insurance uses a system called acquisition costs for a client across multiple products, enhancing product
“risk pooling” where each member pay a small amount called premium. profitability.
3. Diversifying income streams
The premium is pooled together and is paid to individuals who suffered loss. Microinsurance provides an additional source of income either from
The insurance lessens the burden of paying big amount during the time of profit, if the scheme is provided in-house (and well managed), or from fees,
loss, by making small but regular premium payments. if done in partnership with an insurer. The latter situation is
particularly interesting to MFIs, which welcome opportunities to earn
The International Labor Organization (ILO) identified four (4) important income without taking risks.
elements that should be present in an insurance product:
1. Insured event - the trigger event that leads to the payment of
claims for example sickness and death.
Common Types of Microinsurance Products The Loan Officer’s responsibility is to sell the insurance products.
The Loan Officer bears in mind that not all clients can avail of the insurance
Because of the high exposure of the microfinance clients to risks, one products. This is because not all clients are eligible for certain types of
microfinance institution usually offers a variety of microinsurance. The most insurance. For example in health insurance, the insurance company would
common are death insurance, life insurance, disaster insurance, and health rather insure those who are less sickly.
insurance.
Preparation for Actual Promotions
1. Death Insurance The International Labor Organization (ILO) suggests different techniques
Death insurance has long been existing among MFIs. It is commonly called to enable Loan Officers to promote the insurance product well, particularly
“damayan” from the Tagalog term “damay” in time of death. Members those from the low-income group.
usually contribute agreed amount to cover the loan balance of the
member who died. The Loan Officer can use these two techniques to promote insurance
products:
2. Life Insurance
Most MFIs like CARD and ASKI provide life insurance policies to their 1. Imaging- The Loan Officer should use the power of imaging to help the
clients. Life insurance benefits are given upon the death of the client who paid clients consider what happened to the families left by the deceased, and
a certain premium for a particular period of time. Benefits are given how their situation can be less taxing to the family if there was insurance.
directly in cash to the client’s beneficiaries. Although he or she has to be very discreet in discussing delicate words which
clients may find morbid.
3. Disaster insurance 2. Testimonial- The Loan Officer could bring a client who had good
Because the Philippines is generally a disaster stricken country, many experience in insurance to discuss the benefits and effect to the family of
livelihood of MFI clients get affected when disaster strikes. Thus, many MFIs having insurance.
are offering disaster insurance. Because this product requires special skill to
manage, most MFIs make reinsurance arrangements with commercial
insurance companies. 2.3 COORDINATE A MICROFINANCE TRAINING PROGRAM
4. Health Insurance When coordinating a MF training program, you have to prepare well to avoid
Health insurance often covers hospitalization and medicines. Some unnecessary tensions and stress when the training program starts. The
MFIs though, particularly the bigger ones, enroll their group of clients to the training programs referred here is part of the non-financial services that your
Philippine Health Insurance Program or PhilHealth. The benefits are the same MFI offers to your clients. These programs include enterprise development or
as a voluntary member of PhilHealth. Other MFIs have either values enhancement courses.
outsourced health insurance program or own insurance program.
Here are the steps on how to coordinate a microfinance training program:
Responsibilities of Loan Officers
Although the process of promoting insurance products is the same to that of
loans and savings, the actual techniques and methodology are different.
Step 1-Organize the a. Tarpaulin
schedule b. Blackboard / Whiteboard
The Loan Officer is c. Chalk / Whiteboard Markers
responsible for coordinating d. Manila Paper
microfinance training e. Pentel Pens
programs with the cluster f. Coupon Bond
heads and members. Such g. Identification Cards or Name Tags
task requires a lot of h. Camera for pictures and video for documentation.
planning and preparation. It i. Voice recorder
is important to ensure that
all training sessions are Step 4- Disseminate information through cluster heads
scheduled ahead of time so Call and inform cluster heads and ask them to disseminate information to the
that both participants and other members. Announce the activity and all important details during the
trainers can already block center meeting as well.
their schedule.
If the training will be conducted in the community, you may ask for the help of
Step 2- Confirm trainers’ availability the cluster heads in fixing the venue and logistics, especially if you are the one
Contact the trainer and check his or her availability on the scheduled date of assigned to conduct the training session. This will give you some time to
the training session. Once there is confirmation, send a formal letter stating the prepare before the training session starts.
objective of the training and other details to allow him or her design the training
module on the profile of the participants. Include the important details in the
letter such as who will be responsible for the transportation, board and lodging, Facilitate Microfinance Training Program
and the honorarium if any. You may also consider other options in case the
trainer cannot fulfill his/her commitment. When facilitating the training program, it is important to know the profile of the
participants so you can adapt the presentation to them.
Step 3 -Prepare logistics
Once you have confirmed the trainers’ availability, see to it that the trainers will
be provided with all the materials and support they need for the training
session.
It is also the best that you bring along brochures and flyers of your non-
financial services so you can promote it during the training session.
It will be helpful if you will prepare a checklist of the things you need for the
training like the visual aids, materials, and equipment. Below is a list of
common materials needed for training:

Steps in Facilitating a Microfinance Training Program issues of two opposing opinions. Allow the attendees to ask questions, and be
polite every time they want to share their ideas. Avoid unnecessary information
about one’s self or other topics which can side track discussions and training
out of hand.
Closing
o At the end of each session be sure to summarize everything, and end with a
prayer. The training session may end with a short quiz to check if the
participants understood the ideas and concepts. In case there are still vague
ideas, spend some time to clarify the questions. Thank the participants for their
time and cooperation.
Coordinate Microfinance Training Programs
Opening Step #1 Organize the schedule

o Start the session by making sure that the atmosphere is conducive for Step #2 Confirm trainers’ availability
learning. Call directly the trainer and check his or her availability on the
The training sessions should be in a well ventilated room, or if the training scheduled date of training sessions.
session will be held outdoors, be sure you have a black board or people can Step #3 Prepare the logistics
sit comfortably. Once you have confirmed the trainers’ availability, see to it that the
o Begin with a prayer, greet everybody accordingly, and introduce the topic for trainers will be well provided of the materials that they would use for the
the session. Establish rapport with your audience by acknowledging their lecture.
presence and allowing each one to introduce him/herself. Start with an ice Step # 4 Disseminate information through cluster heads
breaker before every session, to keep the senses awake and alert. Once Call and inform cluster heads and ask them to disseminate information.
you’ve set a pleasant mood and all trainees appear relaxed already you may
already start the training Facilitate Microfinance Training Program
Training Proper When facilitating an MFI Program, you have to be ready to face up with group
o Establish eye contact with the participants all the time, so you can have a dynamics and group work.
personal connection with them. More so, such act will help them get connected
to the whole lecture time. Maintain an audible and pleasant speaking voice – o Start the session by making sure that the atmosphere is conducive for
neither too loud nor too soft. A loud voice can irritate the audience, while a soft learning.
modulation might set them to sleep. o Begin with a prayer, greet everybody accordingly, and introduce the topic for
o During the training session, encourage exchange of ideas, most especially the session.
when issues or concerns crop up in the heads of the participants. Through this o Establish eye contact with the participants all the time, so you can have a
healthy exchange of ideas, you can ensure clarity of lecture, and spontaneity personal connection with them.
on the part of the participants. Manage time, and agree to disagree if there are
o During the training session, encourage exchange of ideas especially when Find out if the client is willing to accept the business development
there are issues or concerns raised by the participants. services
o At the end of each session be sure to summarize everything, and end with a of the MFI.
prayer. Thank the participants for their time and cooperation. 2. Coordinate the assistance required with the BDS/EDS Officer
Discuss with the BDS/EDS Officer the basic information you have
gathered from the client to help them identify the next steps to be done.
2.4 PROMOTING CLIENTS’ PRODUCTS Discuss the kind of assistance identified by the client and his
willingness
Businesses of MFI clients vary from trading to manufacturing to services. A lot to avail of the service
of their products are sold and distributed in “tiangges” or flea markets. Discuss with the client the initial feedback of the BDS/EDS Officer
However, some of these products have very good quality and may pass the 3. Set a visit by the BDS/EDS Officer
market standards if they are developed and promoted properly. Thus, one of If there is a recommendation to visit and personally assess the
the non-financial services offered by MFIs is the assistance in the product of the client by the BDS/EDS Officer, set an appointment with
development and promotion of their products; some call it Business or the client so he or she can prepare for it.
Enterprise Development Services (BDS/EDS). Document the major points discussed by the BDS/EDS Officer with
the client.
For some MFIs, this is an expression of their social mission because it hopes
to enhance the capability of the clients in doing business, which hopefully Strategies to Develop or Promote Clients’ Products
would improve their productive and economic situation. 1. Capacity Building Programs
Some MFIs organize trainings or seminars related to enhancing
Some MFIs have BDS or EDS unit that takes care of training and developing marketing skills or product development. This could be conducted by
the clients’ business while other MFIs partner with other institutions to perform the BDS/EDS Department or other external providers.
these functions. In most cases, the role of the Loan Officer is to coordinate the Other seminar or training topics that could be offered to clients are
provision of this service with the BDS officer. It is therefore important that you those related to business management like bookkeeping, accounting,
as Loan Officer understand your role in assisting clients to promote their business registration, inventory, and marketing.
products. 2. Promotion on trade fair or communication media
Most local government agencies, social development organizations or
In terms of business development, the roles of the Loan Officer are: churchbased organizations often invite MFIs to send their clients to
1. Identify the products with potential local trade fairs organized during Christmas season or fiesta. This is a
Identify quality products which can pass the market standards. very good opportunity to promote the products of the clients.
Ask for basic information about the product so you can assess
whether it has potential. This could include a ready source of materials, 3. Identifying Market for the Client's Products
high demand, competitiveness of the price and the product, and the Other services could include forming linkage with buyers who might be
volume capacity in terms of production. interested in the clients’ products or setting-up networks of local buyers and
Ask the client what kind of assistance they need to improve their sellers.
products.
You will understand how they perceive the use of money and how they value
One of the non-financial services offered by the MFI is business development savings, loans, and insurance.
services or enterprise development services.
BDS/EDS is an expression of the MFI’s social mission. Types of Survey
The role of the Loan Officer in assisting clients in their business is to
coordinate with BDS/EDS Department or with partner institution. a. Questionnaire – a list of questions that is administered by the respondent to
To identify the good quality products ask for basic information about get useful information or opinion on various microfinance products and
the product so you can assess whether it has potential or not. services. It is important that the instructions and questions are clear and
The Loan Officer coordinates the assistance required to the simple to ensure that the respondents can answer them correctly. In case
BDS/EDS Officer or partner institutions to allow them to identify the next there are vague questions, the Loan Officer has to be ready to help the
steps to be done. respondent without influencing his/her answer.
Other strategies to assist clients in order to develop or enhance b. Interview – a structured conversation with the respondent at a specified
capacity is through: time. The researcher or the Loan Officer administers the survey and the
1. Capacity building respondent is not given a copy of the survey from. The skills of researcher or
2. Promotion on trade fair or communication media the interviewer is critical in this kind of survey to help the respondents answer
3. Identifying market for clients the questions correctly.
The main role of the Loan Officer is to administer the survey instruments
2.5 ADMINISTER SURVEY ON according to the instructions of the researcher. It is important to attend the
ENHANCEMENT OF orientation to know the objectives of the research and the guidelines in the
MICROFINANCE PRODUCTS conduct of the survey. The results of the survey are usually given to the
AND SERVICES Branch Manager or the research department for data processing and analysis.
Microfinance institutions Survey Administration

conduct survey among their
clients from time to time to Your important task of administering survey is crucial in getting up to date
respond to the fast evolving information from your clients to enhance your products and services. Surveys
needs of the microfinance may be administered to current or former clients and even to prospective
clients. The information clients whose opinion will be helpful in improving your products and services.
generated from these surveys
will keep institutions on track in Preparatory Phase
answering the needs of the 1. Attend orientation given by the management make sure you understand the
clients with regard to financial products. purpose, goal of the research. Knowing the purpose of your survey will help
you focus on how to conduct the survey.
Administering a survey for enhancement of products will deepen your 2. Study and understand how the instrument will be used. This will help you
understanding of the relevance of the microfinance products to your clients. anticipate questions or concerns that the respondents may raise.
3. Prepare work plan so you can accommodate other tasks and duties. If you 7. Allow the respondent to answer and express himself freely. If the first
will be given an additional assignment to administer survey, study your response does not seem to satisfy the question, probe the interviewee politely.
schedule very well so as not to leave out important tasks such as collecting 8. Thank the respondent after the interview and explain how the information
loans. will be of use to the MFI
Questionnaire
1. Explain the questionnaire and the purpose of the survey. Microfinance institutions conduct survey to respond to the evolving needs of
2. Assure the respondents that all the information will be treated with the clients.
confidentiality or anonymity and will not in any way affect his relation with the The common survey methods are questionnaire and interview.
MFI. Questionnaire is a list of questions that is administered by the
3. Do not promise anything to the respondents or create false expectations. respondent.
Inform the respondents that the study is conducted so you can improve your Interview is a structured conversation with the respondent at a
services, but be clear that any changes will not be immediate. specified time.
4. Let the respondent fill-out the questionnaire at his own pace. If he is having Attending the survey orientation will make you understand the
difficulty in any of the survey item, be ready to assist him without influencing purpose and goal of the research.
his answer to the question. It is necessary to explain the purpose of the survey to the
5. Check if the questionnaire is completely filled-out. Inform the respondent if respondent.
he missed any item and find out the reason if it was skipped intentionally. The Loan Officer should assure the respondents that all the
6. Thank the respondent and be sure to answer all his questions regarding the information will be treated with confidentiality or anonymity.
survey before leaving. The survey forms should be completely filled-out.
7. Keep the completed forms and submit them to the Branch Manager or the
officer-in-charge. To name a few, these modules are made by the efforts of the
following:
Interview
1. Set an appointment and be punctual. This will allow you and your PINOYME FOUNDATION
respondent to prepare before the interview.
2. Wear proper attire or your office uniform. NINOY AND CORY AQUINO FOUNDATION
3. Bring all the materials you need for the interview. If you are using a
HANNS SEIDEL FOUNDATION/GERMANY
recorder, check if you have spare batteries or cassette tapes.
4. Inform the interviewee that you will be taking notes while conducting the ARAULLO UNIVERSITY
interview and ask permission before recording your conversation.
5. Set the respondent at ease. Assure the respondent that all the information PUNLA SA TAO FOUNDATION
will be treated with confidentiality.
6. State the questions clearly and repeat if necessary. Rephrase the question ALALAY SA KAUNLARAN INC.
if this is not understood by the respondent.

Core Competencies 1and 2full 1

Uploaded by

Copyright:

Available Formats

Core Competencies 1and 2full 1

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Core Competencies 1and 2full 1

Uploaded by

Copyright:

Available Formats

PHINMA – ARAULLO UNIVERSITY College of Management and Accountancy

3 Step 2. Coordinate with concerned government office. This step

Microfinance institutions (MFIs) undergo an area selection process before

Step 1. Conduct Area Scanning/Mapping. The first step involves

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 1 | Page of 14

CONDUCTING A COURTESY CALL

Conducting a courtesy call means that a representative of the organization

Steps in Gathering Secondary Data

From government agencies

• Enough number of potential clients - the number of potential clients should

Steps in Conducting Area Survey

The specific aspects to observe are the following:

• Is the community neat and clean?

Why Conduct Interviews?

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 12 | Page of 14

5. Prepare a list of questions to make the interview flow easier. If there

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 13 | Page of 14

Presenting Survey Results

Questionnaires should be checked for its completeness and accuracy right

1. The Area Survey Report or Market Research Report is a consolidation

• To have measurable data on the financial services needed;

Why do MFIs Need to Market its Products?

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 16 | Page of 14

In pursuing the marketing objectives of the branch, the Loan Officer

Identifying potential clients

Knowing Client’s Behavior

Result of studies show that microfinance clients’ preferences and

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 22 | Page of 14

10. Ending the Session.

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 23 | Page of 14

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 24 | Page of 14

Step 3. Presenting Benefits of Saving with your MFI

a. Convenience- emphasize that savings will be collected together with

Step 4. Give tips on developing Savings Plan

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 25 | Page of 14

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 28 | Page of 14

Opening Step #1 Organize the schedule

Microfinance institutions Survey Administration

Microfinance Methodologies – CORE COMPETENCIES 1 & 2 for LOAN OFFICER 32 | Page of 14

You might also like