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> Posted by Bhuvana Ramakrishnan, Daniella Llanos Flores, and Singyew Foo, Credit Suisse
#94632957 / gettyimages.com
The Financial Inclusion 2020 project has been talking to the experts lately to get their views on the main recommendations that came out of the 2013 Roadmap to Inclusion process. A group of Credit Suisse Virtual Volunteers conducted interviews with various experts within Credit Suisse. Insights from those conversations helped shape this post.
What can a new shampoo formula teach us about financial services? Quite a bit, as it turns out.
Procter and Gamble (P&G), one of the world’s largest fast-moving consumer goods companies (FMCGs), has an annual research and development budget of $2 billion – with nearly a half a billion going towards consumer research. In emerging markets, this money funds field research that aims to identify how existing products are used and how a new product could become a part of someone’s daily routine. In China, P&G has a simulated Hutong (a typical Chinese home) where researchers can observe consumer behavior and make on-the-spot modifications to product prototypes. They have sent teams around the country to observe how women wash their hair. Such research yielded a shampoo that suds and washes out with little water – a response to the shortage of water and privacy in the villages visited.
> Posted by David Wager, Change Business Analyst, Credit Suisse
The Financial Inclusion 2020 project at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”
This is the second in a series of several posts from this year’s Credit Suisse Virtual Volunteers, where research and insights across a variety of financial inclusion areas will be shared. The post begins:
What are fast-moving consumer goods (FMCG) companies, and what do they have to do with financial inclusion?
FMCG companies sell household and personal products – such as washing detergent, groceries, and toiletries – that are high in volume, low in profit, and normally purchased regularly. These products sell quickly and are relatively low in price. To sell them effectively, FMCG companies have distribution systems that penetrate nearly all parts of the community, including the base of the pyramid. Ensuring that their products are in the right place and appropriate to the consumers’ needs is pivotal to their success.
Financial service providers may be able to learn from the FMCG companies’ tactics and experience. What’s more, by leveraging their extensive networks and strong consumer knowledge, FMCG companies may themselves be able to advance financial inclusion in a way that is beneficial and scalable, providing services for the last mile.
The right product. FMCG companies realize that a variety of product options need to be offered to cater to different consumers. A good example of this is single-use packages for cleaning products. FMCG companies have realized that many lower-income consumers will purchase small packages although they may not be able or willing to pay for a larger box that would serve them for a longer time. In this instance, the product has been tailored to reflect the market. But while this lesson also applies to financial services, it does not always occur in practice. For example, as noted by Ali Ndiwalana of Grameen Foundation Uganda in a Grameen Foundation blog post, financial products have not been adequately adjusted for the market in western Uganda. Here the minimum amount required to open a bank account is the equivalent of $20, a sum accessible to few people. The FMCG companies in this area make their products available in smaller sizes, as small as a 16-cent sachet of the smallest quantity of cooking oil.
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