MDF-Kamurj uses solidarity group lending methodology adapted to the Armenian context to provide affordable credit to its clients. The group guarantee mechanism replaces traditional collateral required by banks.

Reflecting our mission to help support families in Armenia, particularly those who need it most, we target our services to the lowest income entrepreneurs. Women make up the majority of our clients, as they generally have the least means and the least access to credit. Women are targeted also because they serve as the main working part of Armenian population.

The expansion of client businesses and the maturation of client - MDF-Kamurj relationships have generated demand for new types of products, heightened expectations about product quality and variety and underscored the need to explore how to retain MDF-Kamurj clients and attract new clients in a competitive environment. MDF-Kamurj periodically conducts market assessments and ensures that future loan products coincide with client demand.
Download
RURAL MARKET EXPLORATORY RESEARCH REPORT
RURAL MARKET RESEARCH REPORT
CLIENT SATISFACTION REPORT
RURAL MARKET RESEARCH PRESENTATION

MDF-Kamurj is currently developing plans to branch into new markets, such as rural areas and increasing the scale of lending to family businesses. The challenge is to develop a set of products that are consistent with and protect the mission and integrity of MDF-Kamurj values. In order to address the dynamics of the financial markets in Armenia, as well as to stay competitive in the microfinance sector, MDF-Kamurj also offers educational loans, will soon introduce individual loans to clients with a good credit rating, and will provide wider scale non-financial services like: promoting business linkages among clients, basic training on tax, accounting and business registration, etc.

It is needless to say that incorrect and incomplete product development can jeopardize sustainable development of an MFI. In 2003 MDF-Kamurj initiated a product development process. That served as a base for management to ensure a successful decision about the roll-out of the product in its final form. New product development started with discussing the routine data and preparing the design of ad-hoc market research on its basis. Adapted MicroSave-Africa Market Research for Microfinance training was a core element in the phase. It built capacities of MDF-Kamurj in marketing, new product development and qualitative research techniques. The following are phases of the new product development process implemented in MDF-Kamurj:

With the increased competition in the microfinance market, being responsive to clients' needs and expectations is becoming a crucial factor for MDF-Kamurj's sustainable development. Adding depth by increasing the productivity of operations has an utmost importance for MDF-Kamurj, determined to succeed in an increasingly competitive microfinance market in Armenia. However, maintaining growth and quality portfolio can not be possible without listening to clients, learning more about their attitudes and behaviors, and regularly collecting client feedback.

To address this issue, in 2002-2004 MDF-Kamurj together with Microfinance Centre for CEE & the NIS under the financing of SEEP-Network implemented a joint project: Practitioners' Learning Program "Putting client assessment into work". The objectives of the project are as follows:

In order to assess client satisfaction by the products and services currently offered by MDF-Kamurj and client loyalty to the organization, MDF-Kamurj together with MFC (Microfinance Center, Poland) MFC conducted a satisfaction and loyalty survey among its active clients in December 2002. Over 300 respondents have been interviewed face-to-face by fifteen external independent interviewers in three program areas (Yerevan, Gyumri and Vanadzor).

The survey has shown that MDF-Kamurj is on the right path - 90% of clients are overall satisfied with products and services that the organization is currently providing. The clients particularly appreciate the quality relationship with MDF-Kamurj staff and their professionalism, convenient procedure for obtaining loans and the variety of different types of loan products. The easy access to loans, clarity of requirements and simplicity of application forms were also mentioned among those aspects, with which 97-99% of the existing clients are highly satisfied. The survey also found that clients in higher loan cycles are more satisfied, and around 73% of respondents have recommended MDF-Kamurj services to other people, illustrating the level of clients' loyalty to the institution.

In addition to the encouraging results, the survey also pointed out the areas that MDF-Kamurj will consider for further improvement. Particularly, to retain loyal clients, the most important action is to widen the range of financial services, diversification of loans and introducing new products. MDF-Kamurj has already taken resolute steps in this direction: revised its interest rates adjusting them to the market situation, revised incentives for clients in higher cycles, fine tuned loan terms and repayment frequency by introducing new loan options with 3 and 9 month terms and monthly repayment option, designed a prototype for educational loans and started market research in rural areas of Armenia to assess the demand for microfinance services.

Download
MDF-Kamurj client satisfaction and loyalty report, 2002

Another aspect of the MDF-Kamurj strategy is related to increasing the level of client loyalty. In this regard, MDF-Kamurj has designed a new Client Tracking System (CTS), which will help to follow-up the market tends and respond to client suggestions and complains in a timely manner. Loyalty indicators, exit interviews and client monitoring information are incorporated into the CTS, and will serve as a valuable source of information for MDF-Kamurj, helping to make on time and well balanced decisions.

MDF-Kamurj will continue improving and diversifying its services to ensure institutional growth, client retention, and increased customer loyalty and satisfaction with all aspects of the foundation's operations.

Download
MDF-Kamurj presentation of findings form exit survey full