Consultant-Market Research in Microfinance

TERMS OF REFERENCE
Market Research in Microfinance, Yemen
1.0 Introduction:
The Yemen Microfinance Network (YMN) was established in August 2009, by National Microfinance Network Project initiated by Social Fund for Development (SFD) and United Nations Development Program (UNDP), to support a more “inclusive financial sector” in Republic of Yemen. YMN is currently made up of and supporting Eleven Microfinance Institution (MFIs), all around the country. Current Microfinance outreach is just more than 60,000 active borrowers and 55,000 savers.
In supporting the MFIs and sector as a whole, one of YMN’s main activities for the Year 2011 is to conduct a market research, in order to provide quantitative and qualitative information that will help MFIs’ to more tailor their service offerings to meet the needs of current and potential target markets.
2.0 Microfinance History in Yemen
Yemen is one of the poorest countries in the Arab region, ranked 153rd on the Human Development Index (HDI), which places among low human development countries. The country has a population of 23.6 (m) with almost 70% living in rural areas. Poverty is widespread with about 45% of the population living on less than 2$ per day. According to estimates around one million households needs microfinance services to improve their livelihood.
History of microfinance in Republic of Yemen is just a decade and a half old. Pilot projects were started in 1997 by SFD and UNDP in different Governorates of the country, to provide micro loans to the poor entrepreneurs. Some of this pilot project later emerged into programs and foundations, still continuing their services for the poor. Access to microfinance is still largely limited to urban areas and savings services are limitedly existent. Currently, although there are other smaller programs offering microfinance, the network has 11 MFIs’ under its wing operating in the market, all reaching less than 10,000 clients except two institutions.
3.0 Problem Definition:
1. Demand Evaluation & Client Segmentation
Situation: New microfinance institutions and the existing institutions are aware that the market is not saturated and there are potential clients to be reached in different areas.
Business problem:
 What is the potential demand for microfinance
 What new products & services
 What marketplace should be served?
 How do we segment the market using adequate criteria?
 What financial services should be offered to each segment?
 What are the best approaches for the financial services to be delivered?
2. Clients Drop-out
Situation: Many microfinance institutions face the problem of high drop-out rates of
clients
Business problem
 What are the reasons of dropping-out?
 Explore & refine current products & services
 What is the satisfaction level with the products offered?
 How to modify the products, delivery mechanism, and service delivery in
order to increase outreach and reduce the drop-out rate
3. Environmental Assessment
Situation: The microfinance institutions do not have deep understanding about the
macro and local environment
Business problem:
 Is the political, economic, demographic, social and physical situation
conducive to provision of microfinance?
 How will factors such as, prevalence of local markets, transactions that take
place, local security, population movement, household risk exposure, social
capital, roles of men and women, household financial arrangements and
local poverty characteristics influence the future of MFI's
4.0 Objectives of the study:
The market research is mainly to help the MFIs’ in identifying and exploring the actual
needs in order to ensure the maximum outreach to the poor and people in need for
Microfinance services. The Market Research seeks to provide MFIs’ with information
related to existing and new products and services that can be developed in order to
better respond to the needs of the clients, especially the needs not currently being met
by available service offerings.
YMN expectations of the Market research include the following:
 To explore and refine the existing products and services provided by MFIs to
meet clients needs and expectations.
 Explore potential new products and services
 Explore new segments of clients in existing microfinance working areas
 Explore some potential new working areas for microfinance services
 Explore current and provide necessary inputs to re-engineer microfinance
service delivery
 Measure current client’s satisfactions in order to ensure a sustainable sector providing microfinance.
 Investigate into the current environmental factors and country context for microfinance activities.
 Estimate the potential market demand for microfinance services
 Determining the most effective channels to market the Microfinance industry in Yemen for both MFIs to reach more clients and for YMN to promote the Microfinance concept in the country.
5.0 Responsibilities and Tasks:
In order to achieve the research objectives and problem definition, although not limited, the consultant’s tasks are:
 The consultant and YMN should agree on the definition of the problem and objectives so that the research process produces useful information.
 Meet key stakeholders, reviewing and collecting relevant secondary information.
 Developing research instruments that will meet problem definition and research objectives.
 Finalization of pre-testing tools that will be used in the study.
 Design a representing sample.
 Train interviewers and supervisors.
 If no availability of suitable qualified local firm to conduct the surveys with the sample size, the task will be delegated to the consulting firm
 If no availability of suitable qualified local firm to do the data entry process for the interviews and come out with a statistical report that will be used to analyze and write the market research report
 If need assist the network in selection of suitable local firm to conduct survey and do data entry
 Verify the consistency of output of data entry
 Analyze the data, transform data structures into information and segment the relevant information to ensure problem definition and research objectives are met.
 Prepare and present the final report to the network and its members.
6.0 Deliverables:
All the deliverables shall be submitted within the time frame shown in the table below: Reports TimeLine
A complete methodology and design report for the quantitative and qualitative study that shall include the proposed methodology and its components & instruments (data collection, fieldwork management, sample design and a questionnaire design). A separate report shall also be provided detailing protocol for the qualitative study as well as detailed
Study is total of 40 days, specific submission dates to be determined.
guidelines for the qualitative study issues.
Field manual for the quantitative study to describe the objectives and process to carry out by the fieldworks.
Pre testing report (before initiation of field work)
Data cleaning/Validation Report
Draft report
Final report
7.0 Duration:
The duration of the study in total is 40 days. This includes tool preparation, testing, refining, data collections, field visits to the targeted governorates, drafting and finalization of findings. It is expected that the field study will take 20 days. The assignment will begin once the political situation in Yemen is more stable.
8.0 YMN Contributions:
YMN is committed to be responsive to the consulting company which includes:
 Provide the monthly reports of MFIs.
 Provide all relevant literatures and studies that have been done in the microfinance sector.
 Arrange for all logistics for the Market Research activities.
 Provide translation when necessary.
 Provide Office space.
 Conducting the surveys with the sample size through contracting a local Yemeni firm (in case of no availability of any qualified local firm to conduct the interviews, the task will be delegated to the consulting firm).
 To do the data entry process for the interviews and come out with a statistical report that will be used to analyze and write the market research report (Again in case of no availability of any qualified local firm to conduct the interviews, the task will be delegated to the consulting firm).
9.0 Study areas and governorates:
The Market research will be limited to some governorates including some rural areas not far away from the main cities which will include the following: Sana’a, Taiz, Ibb, Aden, Al-Hodeida, Almukala, Seyion, Marib, Hajjah, Lahj and Abyan,
10. Submission
YMN calls on organizations, consultancy companies, individual or group consultant(s) and agencies to submit their CV and proposals including the financial proposal to Khalil.almikhlafi@yemennetwork.org by no later than 9th May 2011.