THE PRODUCT TEST SURVEY by xzz19988

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									 PRODUCT TEST




THE PRODUCT TEST SURVEY
                   By Dorota Szubert




  Yerevan, July 2004
                                           PRODUCT TEST



                                   METHODOLOGY
                                         Methodological brief
                      To study the use of the Swallow loan (source of info, benefits, purposes of loan taking,
                      a decisive person);
                      To estimate demand for the Swallow loan (reasons of lack of interest);
Research objectives
                      To study attitude toward the Swallow loan (satisfaction (overall and detailed),
                      areas for improvement);
                      To segment clients (based on interest in the loan, attitude toward it);
Research technique    Face-to-face questionnaire-based interview
                      Target: Active clients with the Swallow loan (123) and potential clients (252):
                      -In villages currently covered by the pilot test (40)
                      -In potential villages (212)
     Sampling plan
                      Method:
                      -Random sampling (active clients),
                      -Random route sampling (potential clients)
                      Research with current clients was conducted by 6 external interviewers.
                      Research with potential clients was conducted by 16 internal interviewers (loan officers)
    Data collection
                      All interviewers underwent training.
                      Fieldwork: April - May 2004


                      While studying the results the following statistical methods were applied:
                      for checking statistically significant differences between groups – nominal and ordinal
      Data analysis   variables (chi square and Fisher test)
                      Pearson correlation analysis to explore correlations between numerical variables
                      All presented results are statistically significant at the significance level 0.1.

                                            Yerevan, July 2004
                                  PRODUCT TEST


              BASIC CHARACTERISTICS
                          BASIC CHARACTERISTICS
                                                                           Potential in
                                    Current              Potential in
              Characteritic                                                 potential
                                      clients:         current villages
                                                                             villages
                        Age:
              18-40 years old         40%                    38%    35%        33%
                   41-49 y.o.         37%                    46%    37%        35%
                     50 y.o.+         24%                    15%    29%        32%
                         Sex:
                         Male         67%                    51%    53%        53%
                       Female         33%                    49%    47%        47%

                 Education:
                       School                                38%    42%        43%
                                      43%
                      College         36%                    53%    38%        35%
                    Univesity         17%                    10%    19%        21%
        Post-graduate degree          5%                      --    0,4%       1%

               Marital status:
                                                              5%    6%         7%
                         Single       6%
Married / living with a partner       85%                    95%    87%        85%
           Separated/divorced         3%                       --   0,4%       1%
                        Widow         7%                       --   6%         8%



                                  Yerevan, July 2004
                                 PRODUCT TEST


                BASIC CHARACTERISTICS


                        HOUSEHOLD COMPOSITION
                                                                         Potential in
                                   Current              Potential in
               Characteritic                                              potential
                                     clients:         current villages
                                                                           villages
Number of hh members 16+:
                                                            26%    22%       21%
                     1–2             20%
                        3            30%                    34%    20%       17%
                        4            31%                    16%    25%       27%
               5 members+            19%                    21%    32%       34%

Number of children under 16:
                                                            30%   31%        31%
                   No children       37%
                       1 child       34%                    20%   20%        20%
                             2       26%                    25%   29%        31%
                  3 children+        12%                    25%   19%        18%




                                 Yerevan, July 2004
                                                       PRODUCT TEST



               INCOME GENERATING ACTIVITIES
 60% 57%

                                                       53%       53%
                                                                                                current clients
 50%
                                                                                                potential clients (current villages)
                                                                                                potential clients (potential villages)

 40%         38%
                                                                                                33%
                                                             29%
 30%
                              25%
                                                                           23%
                                                                                                     21%
 20%                                    17%
                                                                                       15%
                  12%               12%                                                                                               13%
                                                                              10%                             11%
                                               9%
 10%                     7%                                                               7%
                                                                                                                    3% 3%
            48%         5%        8%         13%         35%        30%            20%         8%        8%          10%             25%
  0%
                                                                                                                                    3%
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                                                       Yerevan, July 2004
                                    PRODUCT TEST



       OTHER CHARACTERISTICS

                           OTHER CHARACTERISTICS
                                                                                 Potential in
                                                                Potential in
                         Characteritic     Current clients:                       potential
                                                              current villages
                                                                                   villages
                   Productive assets:
                                 Tractor        7%                 35%    37%       37%
                                Combine         2%                  --    0,4%      1%
Truck to transport agricultural products        11%                 --    1%        1%
                                     Car        3%                 10%    7%        8%
                                   None         81%                65%    64%       64%
              Access to the market:
                           Very poor            22%                16%     25%      27%
                                Poor            26%                42%     34%      32%
                            Moderate            42%                34%     30%      29%
                                Good            7%                 5%      8%       8%
                           Very good            3%                 3%      3%       3%
             Other income sources:
                              Wages             50%                41%     46%      46%
                        Remittances             22%                18%     20%      21%
                        Work abroad              14                9%      9%        9%
                             Pension            43%                47%     58%      60%
                       Social welfare           15%                 --     --         --
                               Other            5%                 21%     19%      19%
                               None             15%                2%      16%      17%


                                    Yerevan, July 2004
                                         PRODUCT TEST



                  ECONOMIC SITUATION
                             OTHER CHARACTERISTICS
                                                              Potential in    Potential in
                                               Current
                           Characteritic                        current        potential
                                               clients:
                                                                villages        villages

Comparison of net income with other
                           villagers:
          Among those with the lowest           16%              36%    37%      37%
                      Among medium              72%              61%    56%      55%
             Among those with highest           12%              3%     7%       7%
    Subjective evaluation of economic
                                situation:
   we survive only thanks to external help      5%               15%    8%       8%
  we hardly meet basic family expenditures      20%              25%    32%      33%
we meet most of basic family expenditures       29%              23%    29%      31%
 we meet all necessary family expenditures
         and are able to cope with most of
                         unexpected crises      34%              28%    27%      26%
we meet all expenses, cope with crises and
                  can afford some luxuries      13%              10%    4%        2%
 Interviewer’s comparison with other
                            villagers:
           Among those with the lowest          10%              28%    29%      27%
                       Among medium             69%              55%    59%      60%
               Among those with highest         22%              18%    12%      11%



                                         Yerevan, July 2004
                                         PRODUCT TEST




        LOAN IMPACT ACCORDING TO CURRENT CLIENTS

          100%                                         3%
                                        1%
                                             7%               other
Loan helped to expand the business:
more often 80% in other activity
            involved
than breeding or land cultivation,
among those with highest income, good                         imposed me to stop
access to a market, investing in
breeding, harvesting, wood.                  47%
          60%
Loan caused no changes: among those
with lowest income, poor access to a                          caused no changes
market, paying off debts.


          40%
                                                              helped me to
                                                              expand the
                                                              business
          20%                                42%
                                                              helped me to start
                                                              the business


  N=123
            0%                           Yerevan, July 2004
         PRODUCT TEST




DECISION MAKING PROCESS
          AND
      PRODUCT USE



         Yerevan, July 2004
                        PRODUCT TEST



 KNOWLEDGE ABOUT „SWALLOW” LOAN
                  POTENTIAL CLIENTS
100%
                                                    9%
          19%

80%                                                                no   yes


                             60%

60%


                                                    92%
40%       81%



20%                          40%



 0%
       all potential   current villages       potential villages
                         Yerevan, July 2004
                                           PRODUCT TEST



     SOURCES OF INFO ABOUT „SWALLOW” LOAN

loan officer / MDF Kamurj                                                24%
           staff              potential clients (only those who
                                                                                                 35%
                              have heard of Swallow loan)
                              current clients
                                                                                                       37%
           other villagers
                                                                                               34%

                                   5%
             village head
                                               11%

                                                 12%        Potential clients living in potential
               the leaflet
                                               11%          villages more often heard of Swallow
                                                            loan from loan officers, less often from
                                                            other villagers and from a leaflet than
                                             10%
people outside the village                                  those living in villages covered by the
                                      6%                    pilot test.

                                             10%
                    other
                                3%

                              2%
              hard to say



                         0%      5%        10%     15%          20%     25%       30%        35%        40%

                                           Yerevan, July 2004
                                       PRODUCT TEST


          REASONS FOR TAKING „SWALLOW” LOAN
                                CURRENT CLIENTS


               no collateral                                                                    54%


             mobile banking                                  30%


          no other provider                         22%


            good conditions                      20%


            no beaurocracy                       20%
                                                   Other mentioned: on time loan, not much
                                                   time required / not many formalities, loan
              interest rate          11%           duration, trustful organization, RPM way,
                                                   new loan when prepaid.
        I just needed a loan      9%


              staff attitude    7%


                           0%    10%          20%           30%        40%          50%           60%
N=123
                                       Yerevan, July 2004
                                            PRODUCT TEST



IMPORTANCE OF PURPOSES OF TAKING „SWALLOW”
                                   CURRENT CLIENTS
                                            7%
                   inputs                                                 24%
                                                                                                       42%
                                                                                  28%
          land cultivation                         11%
                                                                                                38%
                                                          15%
               harvesting         2%
                                  2%
                                                       13%
           cattle breeding                       10%
                                            7%
                                            7%
          cattle purchase                           12%
                                                                                26%
                                   3%
     equipment purchase             4%
                                  2%
                                   3%
 non-agricultural business         3%
                                      6%
                                                         14%
          family expenses              4%
                                            7%
      education expenses          1%
                                  1%
                                    3%
                     debt         1%
                                  1%
                                                                      third mentioned (n=72)
                   honey           2%                                 second mentioned (n=102)
                                  1%                                  first mentioned (n=123)
                    wood
                                  1%
                  building        2%

                             0%        5%    10%       15%      20%       25%     30%   35%      40%    45%



                                             Yerevan, July 2004
                                             PRODUCT TEST



                              DECISIVE PERSON
                                  CURRENT CLIENTS


          I decided myself                        22%




        I co-decided with
                                                                                                            76%
         family members



        I co-decided with
        other person than    1%
                                        I decided myself – no other source of income, living in medium size
          family member
                                        villages (# of people)
                                        I co-decided – one additional source+, living in small or big villages


                    other    1%



                         0%       10%       20%        30%        40%       50%        60%        70%        80%
N=123
                                             Yerevan, July 2004
                                         PRODUCT TEST


  DECISION MAKING PROCESS AND PRODUCT USE –
                KEY FINDINGS
                                     CURRENT CLIENTS
The main source of information about Swallow loan are loan officers and other villagers both for
  potential and current clients;
POTENTIAL CLIENTS:
Potential clients are rather knowledgeable about Swallow loan (19%, 60% in current villages).
  Some of them have made some attempts to obtain Swallow loan (these are richer people);
CURRENT CLIENTS:
Main benefits are connected with product and its characteristics (no collateral, mobile banking,
  good conditions, no beauracracy);
Interestingly, 20% mentioned they took this loan as there is no other financial provider in the
  area;
Loan money was in most cases spent on inputs (66%), land cultivation (58%and cattle purchase
  (40%). These purposes were also indicated as most important ones;
Such purposes as debt, family expenses, education expenses are mentioned only by a few clients
  mostly as the third important expenditure;
Most of clients made a decision about taking a loan together with other family members (76%).
  This answer was more often indicated by those with one or more additional source of income,
  living in small or big villages;
                                         Yerevan, July 2004
     PRODUCT TEST




FINANCIAL MARKET
  PARTICIPATION




     Yerevan, July 2004
                                            PRODUCT TEST



                 CURRENT USE OF OTHER SOURCES
       100%
                        8%                                           5%
                                           15%                                                17%

       80%


uses

does not use
       60%




                       93%                                          95%
       40%
                                           85%                                                83%



       20%                         16 people ACBA               1 person other banks        16 people ACBA
              8 people – ACBA
                                   7 people other banks         1 person Family / friends   6 people other banks
              1 person - other     3 people UMCOR AREGAK                                    3 people UMCOR AREGAK
                                   1 person Family / friends                                1 person Moneylenders
                                   1 person Moneylenders

        0%

                 current clients   potential clients           current villages         potential villages
                    (n=123)           (n=242)                      (n=40)                   (n=202)


                                            Yerevan, July 2004
         PRODUCT TEST




THE PRODUCT EVALUATION




         Yerevan, July 2004
                           PRODUCT TEST


                     OVERALL SATISFACTION
                        CURRENT CLIENTS
100%



                                                definitely good
80%
                            45%



60%
                                                rather good


40%
                            44%
 Min.=3
 Max. =5
                                                neither bad nor
20%= 4,33
Mean
                                                good
 Median = 4
 Stand. dev.= 0,67
                            11%                                   N=123
  0%
                           Yerevan, July 2004
                                                      PRODUCT TEST



         PROFILE OF OVERALL SATISFACTION GROUPS

                                                OVERALL SATISFACTION
                       Only variables statistically significantly influencing the dependent variables

        Variables:             Neither bad nor good                    Rather good                Definitely good
Nearly significant
                     Age            41-49 years old                   25-35 years old                   50 y.o.+

                     Sex                  Male                               Male                       Female
      Access to a
                                          Poor                             Average                       Good
         market
    Group name                        Makaravanq                            Kajcak                       Azniv
Potato culture
  as the main                              No                                 --                          Yes
      activity
             Branch                      Ijevan                    Ijevan and Vanadzor                  Gyumri
             Village              Achajur, Sari Gjux                       Aygehovit                    Mayisyan
    Competition                         There is                           There is                       no
      Village size
      (number of                         small                                big                       medium
          people)


                                                      Yerevan, July 2004
                                                        PRODUCT TEST


                     SATISFACTION WITH DETAILED ASPECTS
                                                 CURRENT CLIENTS
                     definitely bad        rather bad     neither bad nor good        rather good      definitely good
100%

                                                                                        13%
                                                              18%          20%
                                                  23%                                                              26%
         29%
                                                                                                      34%
80%
                       44%

                                    63%

                                                              41%                       48%
60%

                                                                           53%

                                                  63%                                                              53%
                                                                                                      42%
         58%
40%

                       43%
                                                              20%
                                                                                        20%

20%                                 35%                                    18%
                                                              13%                       10%           22%          17%
                                                  11%
         13%           12%                                                  6%
                                                               8%                        9%                        1%
                                      2%        3%                          4%                        1%           3%
 0%       1%           1%                            1%                                               1%
       application   processing    clarity of     group      loan term       RPM       loan size flexibility of   property
        process         time      application          Yerevan, July 2004 frequency
                                                formation                                          loan sizes     required
                                     forms       process                                N=122-123
                                                                  PRODUCT TEST


                       SATISFACTION WITH DETAILED ASPECTS
                                                            CURRENT CLIENTS
                            definitely bad        rather bad            neither bad nor good                rather good                definitely good
  100%
                                              5%                 3%              5%
                              11%
               22%
                                                             22%
                                                                                                34%                33%
   80%

                                                                                 41%
                              40%            50%
                                                                                                                                   73%
   60%                                                       30%
               41%
                                                                                                                                                        96%

                                                                                                46%                52%
   40%                                                                           27%
                              31%                            24%
               17%
                                             39%
   20%                                                                           15%
               10%                                                                                                                 26%
                              11%                                                               13%
                                                             21%
                                                                                                                   14%
               11%                                                               11%             2%
                              7%              5%                                                 5%                                                      4%
       0%                                     1%                                              M                    1%                  1%




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                                                                      Yerevan, July 2004
                                                                                               xi




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                                                      PRODUCT TEST


                                                        SWOT
                                                 CURRENT CLIENTS
        Cost / advantage        Politeness                                                                  Maintain

                                           Professionalism
                                                             Clarity of application
                                                                     forms

                 Processing time
          Flexibility of RPM Application process
                terms
                            Flexibility of loan                                                       Way of loan RPM
       Group formation                          Property required
Mean




                                  sizes
                                                             RPM frequency
                         Group gurantee
                                                Passbook payment
                                                                                   Loan term
                 Group size                                            Loan size


                                                             Upfront charge




                                                                                      Interest rate
        Less important                                                                                       Improve

                                            Influence on overall satisfaction
                                                        of correlation analysis)
                                          (on the basisYerevan, July 2004
        low                                                                                                   high
                          PRODUCT TEST



               PERCENTAGE OF NEEDS SATISFIED
                       CURRENT CLIENTS
100%

                                               very high
                           37%
80%


                                               high
60%
                           17%

                                               medium
40%

 Min.=0                    37%
 Max. = 100
20%= 61,53
Mean                                           low
 Median = 60
 Stand. dev.= 27,61
                           11%
  0%
                          Yerevan, July 2004               N=122
                                        PRODUCT TEST



                   SATISFACTION – KEY FINDINGS
                                  CURRENT CLIENTS
Relatively high overall satisfaction (89% satisfied), but 45% is definitely satisfied;

More satisfied are female, with good access to the market, living in villages with no access
to competitive sources, in Gyumri, Mayisyan;

Aspects evoking the highest satisfaction are: staff professionalism and staff politeness
(homogenous satisfaction);

Aspects evoking the lowest satisfaction are mostly those connected with prices:
             interest rate (75% dissatisfied or hesitating about evaluation);
             group size (59%);
             upfront charge (54%);
             group guarantee (47%);
             passbook payment (45%);

However only interest rate is of high importance for clients;

The other aspects needing improvement are: loan size and loan term;

Swallow loan seems to fulfill the needs towards external financing to the limited extent.
Though the mean value is relatively high (almost 62%), 48% has less than 50% needs
satisfied;                              Yerevan, July 2004
                                        PRODUCT TEST



      FIRST REACTIONS TO THE PRODUCT
                                POTENTIAL CLIENTS
90%     potential clients (n=329)
                                                                          83%
        current villages (n=39)
80%
        potential villages (n=200)                                 74%              74%

70%


60%     Answers do not sum up to 100%


50%
                                                 43%
40%                                     37%                  37%


30%
                          23%
       21%      21%
20%


10%


0%
               neutral                          negative                 positive

                                        Yerevan, July 2004
                                                            PRODUCT TEST



                                                               LIKES
      potential clients (n=251)
                                                 POTENTIAL CLIENTS
 80%
  current villages (n=40)                                        73% 73%
  potential villages (n=211)
 70%                                                                                            Answers do not sum up to 100%

 60%

                                                                                                                                       47%48%
 50%
                          43% 41%
 40%
                                                                                                                28% 29%
 30%               25%
           23%
                                                                                                20% 20%
                                               18% 18%
 20%
                                        13% 12%
 10%                                                                     6% 6%                                                 6% 6%
              13%           55%           18%          23%           75%  10%  18%                               20%             5%  40%
      0%




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                                                             Yerevan, July 2004
                                                PRODUCT TEST



                                            DISLIKES
   potential clients (n=249)
                                     POTENTIAL CLIENTS
70%
  current villages (n=40)                                                                   66% 66%
   potential villages (n=211)
60%

                                                                                51% 51%
50%
                                  Answers do not sum up to 100%


40%
      32% 32%
30%
                      25% 25%

20%                                      17% 18%
                                  13% 14%
                                                                                                         9%   9%
10%                                                               7%     7%

          33%           25%            5%           13%              8%           55%         63%         10%
 0%
       the interest    the loan        the          loan          number of       grup      group size    none
           rate          term      repayment       amount         formalities   guarantee
                                    frequency

                                                Yerevan, July 2004
                                  PRODUCT TEST



                SATISFACTION – KEY FINDINGS
                            POTENTIAL CLIENTS

 Potential clients usually react positively to the product;

 As the main product strengths lack of collateral and loan delivery is

  mentioned;

 The loan term may be also considered as the strength, but only in current

  villages judging by the relation of mentioned likes (55%) to dislikes (25%);

 The main weakness is group size (66%) and group guarantee (51%);

 Interestingly such characteristics as the repayment frequency, loan amount

  and number of formalities are equally liked as disliked;

 Price should not be considered as a weakness (32%) as it was mentioned by

  23% as strength (particularly potential villages);

                                  Yerevan, July 2004
 PRODUCT TEST




DEMAND




 Yerevan, July 2004
                       PRODUCT TEST


WILLINGNESS TO RECOMMEND SWALLOW LOAN
                    CURRENT CLIENTS
100%

                                            definitely yes

 80%

                           60%              rather yes

 60%
                                            maybe yes, maybe
                                            no

 40%
                                            rahter no
Min.=1                     28%
Max. = 5
 20%
Mean = 4,42
                                            definitely no
Median = 5
Stand. dev.= 0,88     8%
                                    3%
   0%                      2%
                       Yerevan, July 2004                      N=120
                          PRODUCT TEST


       INTENT TO TAKE ANOTHER SWALLOW LOAN
                     CURRENT CLIENTS
100%


                                               definitely yes
                           29%
80%

                                               rather yes

60%
                                               maybe yes, maybe
                           46%                 no

40%
                                               rather no
 Min.=1
 Max. = 5
 Mean
20% = 3,95
 Median = 4                                    definitely no
                           20%
 Stand. dev.= 0,94

                     2%
 0%                            3%
                          Yerevan, July 2004                      N=123
                                                    PRODUCT TEST


                                       PROFILE OF GROUPS
                                             CURRENT CLIENTS


                                               INTENT TO REPURCHASE
                       Only variables statistically significantly influencing the dependent variables


                                                               Neither yes nor
          Variables:        Definitely no      Rather no                              Rather yes        Definitely yes
                                                                     no

                  Age             --                --            18-35 y.o.           41-49 y.o.          50 y.o.+


Additional income
                                  --                --           None or one              One               None
          sources


  Living on wages                 --                --               Yes                  No                 Yes

  Nearly significant                                           Hardly meet basic                        Affording small
Economic situation                --                --                                 Survivals
                                                                 expenditures                               luxuries

   Distance to the
                                  --                --             Remote               Remote              Close
           branch

 Comparison with
   other villgers’                --                --             Medium          Medium and lowest       Highest
          income



                                                     Yerevan, July 2004
                                  PRODUCT TEST



         REASONS FOR „SWALLOW” REJECTION
   CURRENT CLIENTS WHO DO NOT WANT THE NEXT LOAN




            high IR                                    6 people
            I think I will have enough money           1
            Loan size too small                        2
            short loan duration                        3
            group guarantee                            1
            up-front                                   1
            RPM schedule                               1



All people unwilling to take a loan are price-sensitive (all complain about price).




                                  Yerevan, July 2004                           N=120
                                  PRODUCT TEST



                    LOYALTY – KEY FINDINGS
                             CURRENT CLIENTS



 Regarding main loyalty indicators 88% is going to recommend Swallow loan

  (60% definitely), while 85% is going to taken next loan (29% definitely);

 More willing to recommend are those who better evaluate loan impact;

 More willing to take the next loan are older, living closer to the branch;

 Main reason was Swallow loan rejection is price. The other is short loan

  duration;

 Those who are willing to take the next loan also complain about interest rate

  and loan duration;



                                  Yerevan, July 2004
                                               PRODUCT TEST



                     WILLINGNESS TO BUY A PRODUCT
                                     POTENTIAL CLIENTS
                                                                                         No statistically significant difference
              100%         2%                                                      3%

                          19%                        26%                          18%
               80%
                                                                     50%                        hard to say
             51%                     57%                                                        definitely yes
                          32%                                                     32%           rather yes
               60%                                   31%
                                                                                                maybe yes, maybe no

                                                                                                rather no
               40%
                          24%                                                     23%           definitely no

                                                     28%

               20%
                          14%                                                     14%
                                                                     35%
                                                     10%
             34%          10%        15%                                          11%
                                                     5%
                0%
Min.=1                             Min.=1                            Min.=1
Max. = 5
                     potential clients      current villages             potential villages
                                   Max. = 5                          Max. = 5
Mean = 3,37             (n=251) Mean = 3,62     (n=39)                         (n=212)
                                                                     Mean = 3,38
Median = 4                        Median = 4                         Median = 4
Stand. dev.= 1,23                               Yerevan, July 2004
                                  Stand. dev.= 1,13                  Stand. dev.= 1,25
                                               PRODUCT TEST



                                  PROFILE OF GROUPS
                                         POTENTIAL CLIENTS


                                            WILLIGNESS TO BUY
                 Only variables statistically significantly influencing the dependent variables


                                                          Neither yes nor
         Variables:   Definitely no       Rather no                            Rather yes         Definitely yes
                                                                no

               Age      36-40 y.o.         36-40 y.o.        18-35 y.o.         50 y.o.+            36-49 y.o.


               Sex           --                --              female             Male                Male


    Contribution of
                      26-75 less often      76-100         0-25 less often          --                0-25
     other sources

 Involved in potato
                            no                no                 --                 --                 Yes
            culture

        Involved in
                             --               yes                --                no                   --
  vegetable culture

Competitive sources
                            no                no                 --                 --                 yes
              users




                                                Yerevan, July 2004
                                            PRODUCT TEST


                            PROFILE OF VILLAGES
                                    POTENTIAL CLIENTS

                                        WILLIGNESS TO BUY
            Only variables statistically significantly influencing the dependent variables


                                                       Neither yes nor
   Variables:     Definitely no        Rather no                           Rather yes         Definitely yes
                                                             no
                   Echmiadzin,
      Branch                            Artashat           Gyumri           Vanadzor             Vanadzor
                 Kotajk, Artashat
                   Khashtarak,
                   Erazgavor,           Achajur,           Hajanist,
                                                                                                 Hovtashat,
                  Maisyan, Sajat-      Griboedov,         Paravaqar,        Hakharcin,
      Village                                                                                    Akhuryan,
                 Nova, Mkhchyan,         Verin,          Garibjanyan,    Ajgehovit, Gargar
                                                                                             Shahumyan, Gargar
                     Aramus,           Mkhchyan           Majakovski
                    Griboedov
                                                                         Medium villages      Medium villages
  Village size   Medium villages     Medium villages    Small villages
                                                                           less often           less often
Access to the
                  Moderate less       Moderate and        Poor and
market in the                                                                  Poor              Very good
                     often               good             moderate
      village

 Presence of
                       no                  --                 --                --                 Yes
 competition



         Site         valley               --           Mountaneous             --                  --

                                            Yerevan, July 2004
                                                          PRODUCT TEST



                 REASONS FOR PRODUCT REJECTION
                                                POTENTIAL CLIENTS
        40%
                                                                                                           36%
        35%

        30%


        25%       Potential clients living in potential villages more
                  often think product generally is not acceptable,                21%
                  complain about group guarantee and do not
        20%       consider taking a loan at all. They less often think
                  this loan is risky, expensive or group size is too big.
        15%                                          13%
                     11%
                                                                                              10%
        10%
                                                                       7%

         5%
                                      2%

         0%
                 the product      the loan is        group         group size   risky loan    weak        I do not
                    is not        expensive        guarantee         too big                 business     consider
                 acceptable                                                                             taking a loan
                                                                                                            at all
Answers do not sum up to 100%
                                                           Yerevan, July 2004
                                                     PRODUCT TEST



                                          LOAN PURPOSES
                                               POTENTIAL CLIENTS
                                                                                     41%
                                inputs   38%
                                                                                    40%
                                                                                       44%
                 land cultivation        53%
                                                                                            46%
                                                  10%
                       harvesting        15%
                                                     11%
                                                                                            46%
                 cattle breeding         50%
                                                                                           47%
                                                                                        43%
                cattle purchase          32%
                                                                                     41%
                                                           16%
          equipment purchase             18%
                                                           16%
                                                                       25%
   non-agricultural business             12%
                                                                    23%
                                                                   22%           potential villages (n=153)
                family expenses          27%
                                                                    23%
                                                                                 current villages (n=34)
                                                7%
           education expenses            18%
                                                 9%                              potential clients (n=187)

                                     0%         10%          20%           30%   40%         50%             60%

Answers do not sum up to 100%
                                                      Yerevan, July 2004
                                               PRODUCT TEST



              WILLINGNESS TO RECOMMEND A PRODUCT
                                     POTENTIAL CLIENTS
              100%         1%                                                     1%



               80%                                   40%               77%                      hard to say
                          44%                                                    45%
             79%                     87%                                                        definitely yes

               60%                                                                              rather yes

                                                                                                maybe yes, maybe no

                                                                                                rather no
               40%
                          35%                        47%                         32%            definitely no



               20%
                          13%                                          7%        14%
                                                      5%
             8%            5%        8%                                           4%
                                                      8%
                0%         3%                                                     3%
Min.=1                             Min.=2                              Min.=1
Max. = 5
                     potential clients      current villages               potential villages
                                   Max. = 5                            Max. = 5
Mean = 4,14             (n=223) Mean =4,18      (n=38)                           (n=185)
                                                                       Mean = 4,13
Median = 4                        Median = 4                           Median = 4
Stand. dev.= 1,00                               Yerevan,
                                  Stand. dev.=0,86         July 2004   Stand. dev.= 1,03
                                                PRODUCT TEST



                                  PROFILE OF GROUPS
                                        POTENTIAL CLIENTS


                                        WILLIGNESS TO RECOMMEND
                 Only variables statistically significantly influencing the dependent variables


                                                           Neither yes nor
        Variables:    Definitely no       Rather no                                Rather yes        Definitely yes
                                                                 no

               Sex          --                 --                  --                female                Male


                                                              Separated /                               Separated /
    Marrital status       Widow                --                                    Singles
                                                               divorsed                             divorsed less often


    Comparison to      Medium less
                                           Better off           Poorer          Poorer and medium       Better off
    other villagers      often

                                         Good and very                           Very poor, poor,     Good and very
 Access to market       Very poor                                good
                                             good                                    medium               good

                      Affording small    Affording small    Meeting most of                         Able to cope with
Economic situation                                                                      --
                          luxuries           luxuries      basic expenditures                             crisis




                                                Yerevan, July 2004
                                        PRODUCT TEST



                            PROFILE OF VILLAGES
                                POTENTIAL CLIENTS

                                WILLIGNESS TO RECOMMEND
           Only variables statistically significantly influencing the dependent variables


                                                   Neither yes nor
   Variables:   Definitely no      Rather no                             Rather yes           Definitely yes
                                                         no
                                                     Khashtarak,
                                                                                             Akhuryan, Gargar,
                                                     Paravaqar,       Hajanist, Ajgehovit,
      Village        Keti            Maisyan                                                   Baghramyan,
                                                      Bjurakan,           Sajat-Nova
                                                                                                Shahumyan
                                                      Mkhchyan
Access to the
market in the     Very good             --              good          Poor and moderate         Very good
      village

 Presence of
                      --               no                 --                  No                   Yes
 competition



         Site         --                --              valley           Mountaneous              valley




                                         Yerevan, July 2004
                                        PRODUCT TEST


            WILLINGNESS TO BUY – KEY FINDINGS
                                 POTENTIAL CLIENTS
More than half of potential clients is willing to buy the product (85% current clients);

Usually these are people with some experience in financial market, men;

Obviously more willing to buy are people living in villages covered by the pilot test;

Main reason to reject the product is lack of need / acceptance for a loan;

Loan is perceived to be the best for such purposes as cattle breeding (more often current

  villages) and land cultivation. The latter is one of the main purposes for current clients as

  well);

Spring months are the best for loan taking;

Nearly 80% is willing to recommend (more often current villages);

This result is similar to result of current clients;

Usually more willing to recommend are male, with better access to the market, better off;




                                         Yerevan, July 2004
     PRODUCT TEST




DEMAND SEGMENTS




      Yerevan, July 2004
                                     PRODUCT TEST


      PROFILES OF CLIENTS - RETENTION
                           CURRENT CLIENTS
80%
      Segments:
      1 – prospective (willing to recommend and
      repurchase) 72%
60%
      2 – lost (not willing to recommend and
      repurchase) 10%
      3 – under question mark (willing to either to
40%
      repurchase or recommend) 18%
                                                                   72%


20%
                      16%

                      10%
0%                                                                  3%
      not willing to repurchase or                        willing to repurchase or
                hesitating                                       hesitating

                       willing to recommend
                       not willing to recommend or hesitating
                                     Yerevan, July 2004                              N=120
                                                         PRODUCT TEST


                                                    SEGMENTS
                                              CURRENT CLIENTS
                       Branch
100%   lost          prospective          under question mark
                                                    12%
               19%                 24%
80%




60%


                                                    76%
                                   64%
40%            81%
                                                                                                   Village
20%
                                                                100%

                                                                                               12%        13%                       11%
                                   12%              12%                 24%        25%                                  19%
 0%                                                             80%



              Gyumri           Vanadzor            Idjevan
                                                                60%

                                                                                               68%
                                                                                                                                    78%
                                                                40%
                                                                        63%        67%                     87%          81%

                                                                20%




                                                                        13%                    20%
                                                                 0%
                                                                                   8%                                               11%




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                                                                     lost
                                                         Yerevan, July 2004             prospective             under question mark
                                                                                                                             N=120 -123
                                 PRODUCT TEST



               PROFILES OF SEGMENTS
                        CURRENT CLIENTS

              18-35 years old
              Separated / divorced
       LOST
              Among those with lowest & medium income
              Less caused no changes
              41 y.o.+
              Widow(er)
PROSPECTIVE
              Among those with lowest & medium income
              Loan helped to expand the business
    UNDER     36-40 years old
  QUESTION    Among those with highest income
     MARK     Singles




                                 Yerevan, July 2004
                                                       PRODUCT TEST


                                                         SWOT
                                 CURRENT CLIENTS - PROSPECTIVE
            Politeness
       Cost / advantage                                                                                    Maintain

                                                                       Professionalism
                                       Clarity of application
                                               forms
                        Processing time

                    Flexibility of RPM             Application process
                          terms                                     Flexibility of loan
                                                                          sizes                      Way of loan RPM
                                             Group formation       Property required
                                 RPM frequency
Mean




               Group gurantee
                                                           Passbook payment
                                                                                         Loan term
                          Group size                  Loan size
                                                                  Upfront charge




                                                                                         Interest rate

       Less important                                                                                       Improve

                                            Influence on overall satisfaction
                                                        of correlation analysis)
                                          (on the basisYerevan, July 2004
       low                                                                                                   high
                                                     PRODUCT TEST


                                                      SWOT
                        CURRENT CLIENTS - UNDER QUESTION MARK
       Cost / advantage                                                                                    Maintain
                                                                                       Politeness

                                         Professionalism                                     Clarity of application
                                                                                                     forms


                                                    Processing time
                                                                            Flexibility of loan
                    Way of loan RPM                                               sizes

                                                   Flexibility of RPM
Mean




       RPM frequency                                     terms
             Property required                                          Group formation
  Group gurantee           Loan term           Application process                        Loan size

       Passbook payment
                          Group size




                              Upfront charge
                                               Interest rate
       Less important                                                                                        Improve

                                          Influence on overall satisfaction
                                                      of correlation analysis)
                                        (on the basisYerevan, July 2004
       low                                                                                                    high
                                            PRODUCT TEST


                                  SEGMENTS
                               CURRENT CLIENTS
 After breakdown of intent to repurchase and to recommend three segments were created: lost (neither

   willing to recommend no to repurchase), prospective (both willing to recommend and repurchase) and

   under question mark (either willing to recommend or to repurchase);

 The majority are prospective (72%). More often these are older people, with low and medium income.

   They are more satisfied with most of detailed aspects. Swallow loan meets most of their financial needs

   and more often than other groups they have no experience with competition. The only area for

   improvement is loan term and interest rate;

 The next biggest group are those under question mark (18%). They are middle age or older, have the

   highest income. Swallow loan satisfies their needs to the average extent. They are more often ACBA

   users. To attract this group loan size and group formation process should be changed;

 The smallest group are lost ones. They are younger, with lowest income. They are less satisfied with

   most of Swallow loan characteristics. They have some experience with competition. Swallow loan

   satisfies their needs to the low extent. They mainly complain about price;




                                             Yerevan, July 2004
                                     PRODUCT TEST



      PROFILES OF CLIENTS - RETENTION
                             POTENTIAL CLIENTS
       Segments:
80%
       1 – prospective (willing to recommend and purchase) 54%
       2 – lost (not willing to recommend and purchase) 17%
60%    3 – under question mark (willing to either to purchase or
       recommend) 29%


40%


                     26%                                           54%
20%


                     17%
0%                                                                  3%
      not willing to purchase or                           willing to purchase or
               hesitating                                        hesitating

                      willing to recommend
                      not willing to recommend or hesitating
                                      Yerevan, July 2004                            N=120
                                   PRODUCT TEST



          PROFILES OF SEGMENTS
                        POTENTIAL CLIENTS

              Verin, Maysian, Bjurakan, Paravaqar, Khashtarak
       LOST   Better off (can afford some luxuries)
              No wages as source of income

              Gargar, Akhuryan, Hovtashat
              41 – 49 y.o.+
PROSPECTIVE   Better off (can afford some luxuries) less often
              Living on wages
              Potato culture
              Erazgavor, Garibjanyan, Aramus
    UNDER     18-35 years old
  QUESTION    Better off (can afford some luxuries)
     MARK     Living on wages
              Not involved in potato culture




                                    Yerevan, July 2004
                              PRODUCT TEST


                             SEGMENTS
                         POTENTIAL CLIENTS


 Similarly as in case of current clients the majority are prospective –

  54% (72% current);

 More often these are older people;

 The next biggest group are those under question mark – 29% (18%);

 They are middle age, better off;

 The smallest group are lost ones – 17% (10%);

 They are better off;




                               Yerevan, July 2004
                                                   PRODUCT TEST


                 DEMAND ESTIMATION IN VILLAGES
                                        POTENTIAL CLIENTS
                                                % of           realistic
                                   % of                                      optimistic prognose                 # of     # of
             number of people in              willing to     prognose
     village                     willing to                                  (based on willing to   # of lost prospecti questiona
                target group                   buy or       (based on
                                    buy                                      buy and hesitating)                  ve       ble
                                              hesitating   willing to buy)

  Sajat-Nova         221                 50          80         111                  177                  44       111        66
Garibjanyan          280                 40         100         112                          280          28       112       140
     Maisyan         385                 33          56         128                  216                 146       146        96
 Khashtarak          280                 50          80                140           224                  70       176        36
         Keti        348                 50          80                174                   278          77       153       115
   Griboedov         490                 40          50                196                   245          69       211       211
  Majakovski         438                 45          91                199                   399          48       193       193
   Mkhchyan         1200                 18          36                218                   432         684       168       348
   Erazgavor        1120                 20          60                224          672                            246       874
   Voskevaz          315                 73          91                229                   287          32       189        95
Baghramyan           385                 60          90                231                   347          77       231        77
     Hajanist        630                 38          92                242                   580         107       265       265
     Aramus         1120                 22          33                249                   370         280       280       560
 Shahumyan           323                 78          89                251                   287          36       252        36
    Akhuryan         285                 90         100                257                   285                   257        29
    Ajgehovit        420                 67          89                280                   374                   315       105
   Paravaqar        1050                 30          90                315          945                  525       399       137
      Gargar        320                 100         100                320                   320                   320
   Musaeljan         756                 44          78                336          590                  106       431       219
     Achajur         630                 55          64                344                   403          69       164       208
    Bjurakan         700                 50          67                350                   469         280       280       140
        Verin       1050                 36          36         382                          378         315       420       315
   Hakharcin         678                 70          80         475                          542                   529       149
   Hovtashat         630                 90          90         567                          567                   561        69

                                                   Yerevan, July 2004

								
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