1. RURAL MARKETING STRATEGIES OF MICRO FINANCE INSTITUTIONS- A
VIEW
By.
Mrs.A.Pankajam, Associate Professor, Avinashilingam School of Management Technology,
Avinashilingam
Deemed University for Women, Coimbatore-43
ABSTRACT
Rural India was once considered a mere painter’s muse and not a uberous ground for
business. The reason being – around 42% Indians are below poverty line earning around
$1.25 a day. Addressing poverty-based issues, NGOs, Microfinance Institutions (MFIs)
and social entrepreneurial organisations have emerged in a big way to provide sustainable
solutions to the poor through scalable business models and also created market
opportunities for business transforming the rural markets’ landscape substantially.
In the 21st century, rural India has evolved in a big way. The growing literacy rates,
rising income levels, increasing purchasing power and consumption levels of people have
grabbed the attention of corporates, who have erstwhile wooed urban consumers to buy
their products. As of 2009, rural regions are flocked by big companies like Coca-Cola,
Nokia, HUL, LG, Bharti Airtel, ITC, Bajaj Allianz and Godrej. Over the years, these
companies also realised the need to develop rural regions as a key for their growth as well
as the nation's economic development. In the process of charting out ways for market-
based development, they partnered with MFIs to expand their network. These MFIs,
acting as distributors to the companies, are benefitting them by enhancing their brand
visibility in rural areas, helping them in tapping more rural consumers, save distribution
costs, etc.
Micro Finance Institutions (MFIs) now have access to staggering 50 million clients with
powerful social network. Their understanding of group dynamics, bonding and proximity
to customer is unparalleled. The extensive reach and power of SHGs are now being
leveraged by companies to penetrate this market. And that is precisely why several
consumer product companies are exploring this emerging retail channel that is promising
to take them into the heart of India's vast rural hinterland.
The success stories of companies which they worked together with MFI paved a way to
develop new channel to pry open the BOP. MFIs are helping various industries like
FMCG, Consumer Goods, Financial service, Insurance to reach the untouched places of
India. The situation in the not-too-distant future when MFIs may mutate into divisions or
wings of large corporations. This paper attempts to expose the rural marketing strategies
like Creating a consumer capacity of MFIs.
Key Words: Rural India, Microfinance Institutions (MFIs), rural retailing, E-Chaupal