Ariadne Magalhães, Arvind Kidambi, Chiara Corbetta, Juan Recinos Jensen, Teresa Haberland, Yasmina BenchekrounMarketing For Low Income Populations, Prof. Edgard Barki, FGV-EAESP26.09.2011

Banco Pérola: Microcredit for the entrepreneurial dreams of the

young and poor

Agenda

1. Introduction

2. Marketing Mix Strategies

3. Strengths & Weaknesses

4. Opportunities &Threats

5. Strategic and Operational Propositions

Banco Pérola founded in 2009

Inspiration

“Banco Pérola

makes a difference

in people’s lives

and does not just

invest in businesses.”

Alessandra França, Founder & CEO

InspirationInspiration

Objectives

• Provider of microcredit for the young and poor in Sorocaba, São Paulo

• 110 customers (75% female) from classes C,E & mainly D and growing

• R$300.00 total loan volume• 1,8 % loan default rate

Activity

• Founders personal experiences• Grameen Bank concept

• Creation of personal financial stability, poverty reduction, self-esteem

• turning the youth into agents of change for the community

Maketing mix strategies (7P’s)

Place

Product

Price

• microcréditos or empréstimos • Capital de Giro (working capital)• Capital Fixo (fixed capital)• Capital Misto (mixed capital)

• 4% interest rate per month (48 % per year)• TAC can vary between 1 % to 3 % 1% = a month 2% = 31 to 119 days (4 months)

3% = 4 months and over

• Work in the BOP community• Bairro Ana Paula Eleuterío • Bairro Vitoria Régia Sorocaba district • Bairro Cajuru do Sul

Maketing mix strategies (7P’s)

Process

People

Promotion

• Alessandra França• Agentes de Oportunidades

• Social media (Facebook – Twitter – Orkut -Beta)• Nonpaid stimulation (Parceiros + newspapers) • Word-of-mouth • Website www.bancoperola.com.br

• Efficient process of micro credit approval (no proof of income/guarantees)• individual socio-economic screening

Physical

Evidence• Positive assessments from Project Pérola

“They (prospective clients) open their complete life to us.”

Alessandra França, Founder & CEO, 13/09/2011

Strengths & Weaknesses

Strengths

• Understanding of its bop clients• Insider knowledge of the youth segment• Maintenance of proximity to the entrepreneurs

• Unique products tailored to the poor• Unbureaucratic requirements• Programs of Acompanhamento • Low interests• Loans towards formal and informal sector

• Trust relations

• Network of important partners• Financial enablers and institutional supporters

• High-spirited culture

“We continue to learn from and with them (the clients).”

Alessandra França, Founder & CEO, 13/09/2011

Strengths & Weaknesses

Weaknesses

• Lack of long-term foresight• Focus on short term challenges:

• The development of the Solidarity Groups• The independence of the entrepreneurs• The presence of informal businesses

• Little acted division of labour

• Danger of a social tunnel vision

• Unfocused partners management • Only Alessandra• Lack of strategy and of oversights• Excessive pressure from financial partners

• Limited effectiveness of marketing channels

Opportunities & Threats

• Growing demand and market• applications of small entrepreneurs grew about 45%

between April 2010 and 2011; still representing a relatively small balance of R$ 1.1 billion

• Significant investments of NGOs, private and public banks

• Governmental support• Low default rates

• Young demographics with growing entrepreneurial spirit

• Economic growth of Brazil

Opportunities

Opportunities & Threats

Threats

• Growing number of strong competitors • Private national and international banks,

government banks, Banco do Povo

• Pressure from partners

• Partners turning into competitors

• Low education, credit/business understanding of BOP client

• Uncertainty of personal development of client/unreliabilityrisk

• Business informality

Strategic & Operational propositions

• Improve organizational structures and processes

• Adjust current marketing channels

• Build an aspirational brand

• Build a partnership strategy

• Develop a franchise business“Developing the business is a piece-meal process.”

Alessandra França, Founder & CEO, 13/09/2011

Interview with Alessandra Franca

“I think that a young person has to believe in the potential that each one has, in his dreams. That it is possible. Sometimes for people who don’t have a lot of money, the path is further, but if they have perseverance and decide to go ahead, it is possible to reach the end of the path.

This is the most important thing, because sometimes the youngsters, specially the poor ones, think that because they don’t have money, things can´t happen, but it´s actually possible. 

We have several examples here; the youngster that wants to get to know Banco Pérola can enter the site… We are a community of young people that believe it is possible. ”

Alessandra França, Founder & CEO, 13/09/2011

The message

Muito Obrigado