Contents -- Acknowledgements -- Foreword -- Acronyms and Abbreviations -- I. Preparing for Diversification -- 1 Understanding Product Diversification -- 1.1 What Is Product Diversification? -- 1.2 Why Diversify? -- 1.3 The Damage Diversification Can Cause -- 1.4 Managing the Challenges and Opportunities -- 1.5 What Is a Strategic Product Mix? -- 1.6 Towards Successful Product Diversification -- Recommended Reading -- 2 Managing Product Development -- 2.1 The Product Development Process -- 2.2 The Integration of Product Development -- 2.3 To Diversify or Not to Diversify? -- 2.4 Prioritizing Diversification Ideas -- 2.5 Using the Product Development Process to Manage Risk -- 2.6 Product Development vs. Product Management -- Recommended Reading -- 3 Developing New Markets -- 3.1 The Process of New Market Development -- 3.2 Understanding Market Segmentation -- 3.3 Creating Effective Market Segments -- 3.4 Profiling a Market Segment -- 3.5 Selecting a Target Market -- 3.6 Developing an Outreach Strategy -- Recommended Reading -- II. Product Options -- 4 Savings -- 4.1 Do Poor People Need Savings? -- 4.2 What Are the Limitations of Available Savings Options? -- 4.3 What Are the Characteristics of Appropriate Savings for the Poor? -- 4.4 What Are the Product Options? -- 4.5 Who Should Offer Voluntary Savings? -- 4.6 Meeting the Challenges of Voluntary Savings for the Poor -- 4.7 Conclusion -- Recommended Reading -- 5 Long-term Savings and Micropensions -- 5.1 Supply and Demand Perspectives on Long-term Savings -- 5.2 Long-term Savings Products for the Poor -- 5.3 Key Issues in Offering Long-term Savings and Insurance -- 5.4 Conclusions -- Recommended Reading -- 6 Microenterprise Loans -- 6.1 Back ground on Microenterprise Loans -- 6.2 Major Microenterprise Lending Methodologies -- 6.3 Choosing a Methodology.

6.4 Designing a Microenterprise Loan Product -- 6.5 Moving from One Methodology to Another -- Recommended Reading -- 7 Housing Loans -- 7.1 Why Offer Housing Loans? -- 7.2 How Do Housing Loans Differ from Other Loan Products? -- 7.3 Key Design Decisions -- 7.4 Risks and Challenges -- 7.5 Assessing Potential Demand -- 7.6 Conclusion -- Recommended Reading -- 8 Emergency and Consumption Loans -- 8.1 What Is an Emergency Loan? -- 8.2 Why Do Most MFIs Not Offer Emergency Loans? -- 8.3 Why MFIs Should Offer Emergency Loans? -- 8.4 When Is Credit the Right Choice? -- 8.5 How to Design an Emergency Loan -- Rec om mended Read ings -- 9 Microinsurance -- 9.1 What Is Insurance? -- 9.2 Savings, Credit or Insurance? -- 9.3 MFIs and Their Microinsurance Motivation -- 9.4 Institutional Arrangements -- 9.5 Microinsurance Products -- 9.6 Where to Begin? -- 9.7 Conclusions and Recommen dations -- Recommended Reading -- 10 Leasing -- 10.1 What Is Leasing? -- 10.2 What Can Be Leased? -- 10.3 Leasing vs. Lending -- 10.4 Under What Conditions is Leasing Viable? -- 10.5 Can Partnership Make It Work? -- Recommended Readings -- 11 Money Transfers -- 11.1 Money Transfers and MFIs -- 11.2 How Money Transfers Work -- 11.3 Money Transfer Business Models for MFIs -- 11.4 Developing a Money Transfer Strategy -- Recommended Reading -- 12 Non-financial Services -- 12.1 What Are Non-financial Services? -- 12.2 How Can Non-financial Services Be Provided Together with Financial Services? -- 12.3 When Is it Appropriate for MFIs to Provide Non-financial Services? -- 12.4 How Should the Integration Process Proceed? -- Recommended Readings -- 13 Grants -- 13.1 When and How Can Grants Be Use ful? -- 13.2 General Characteristics of Effective Grant Design -- 13.3 Leveraging Public Cash Transfer Schemes -- 13.4 Financing Micro-Grants -- 13.5 Conclusion -- Recommended Reading.

III. Market segments -- 14 Targeting Marginalized Markets -- 14.1 Motivations for Targeting -- 14.2 Targeting Techniques -- 14.3 To integrate or not to integrate? -- 14.4 Serving Disabled Persons -- 14.5 Serving Persons Living with HIV/AIDS -- 14.6 Subsidies and Sustainability -- Recommended Readings -- 15. Pre-microfinance for the Poor est -- 15.1 Who are the Poor est of the Poor? -- 15.2 Why Do MFIs Not Serve this Market? -- 15.3 What Products and Services Are Required? -- 15.4 Product Adaptations -- 15.5 Conclusion -- Recommended Reading -- 16 Microfinance for Youth -- 16.1 Should MFIs Target Youth? -- 16.2 Characteristics of Youth -- 16.3 How Can Microfinance Meet the Needs of Youth? -- 16.4 Designing a Portfolio of Products for Youth -- 16.5 Overcoming the Challenges of Serving Youth -- 16.6 Conclusion -- 17 Microfinance for Women -- 17.1 Characteristics of the Female Market Segment -- 17.2 Targeting Women -- 17.3 Product Design -- 17.4 Outreach Strategy -- 18 Post-crisis Microfinance -- 18.1 When Is Microfinance an Appropriate Intervention? -- 18.2 Characteristics of a Post Crisis Environment -- 18.3 Characteristics of Post-Crisis Clients -- 18.4 Designing a Post-Crisis Product Portfolio -- 18.5 Delivering a Post-Crisis Product Portfolio -- 18.6 Preparing Clients and Institutions for Crisis -- 19 Islamic Microfinance -- 19.1 What Is Islamic Finance? -- 19.2 What Is the Market for Islamic Microfinance? -- 19.3 What Products Could Islamic Microfinance Offer? -- 19.4 What Are the Challenges Inherent in Serving this Market? -- 20 Rural Microfinance -- 20.1 What Is Rural Microfinance? -- 20.2 The Challenges of Rural Financial Service Provision -- 20.3 Serving the Rural Market -- 20.4 An Appropriate Product Mix for Rural Microfinance -- 21 SME Finance -- 21.1 Defin ing the SME Mar ket -- IV Diversifying Successfully.

22 Building and Managing Part nerships -- 22.1 Defining Partnership -- 22.2 Benefits and Risks of Partnership -- 22.3 The Partnering Process -- 22.4 Partnership Agreements -- 22.5 Communicating for Success -- 22.6 Conclusion -- 23 Delivering a Diverse Product Portfolio -- 23.1 Adapting the Institutional Culture -- 23.2 Deciding Who Should Deliver What -- 23.3 Empowering Staff to Deliver Multiple Products -- 23.4 Communicating with Clients -- 23.5 Strengthening Systems to Manage Greater Complexity -- 23.6 Managing Change -- 24 Product Portfolio Management -- 24.1 What Is Product Portfolio Management? -- 24.2 Product Strategy -- 24.3 Strategy Implementation -- 24.4 Portfolio Review -- 24.5 Removing a Product from the Mix -- 24.6 How Many Products Is Too Many Products? -- Bibliography -- Figures -- Figure 1.1 The Total Product -- Figure 1.2 Successful Product Diversification -- Figure 2.1 Product Development Process -- Figure 2.2 Risk and Return Assessment Framework (example) -- Figure 3.1 New Market Development Process -- Figure 3.2 Increasing Value through Market Segmentation -- Figure 3.3 Comparing New Market Options -- Figure 4.1 Preconditions for Intermediating Savings -- Figure 6.1 Logic of Income-generating Loans -- Figure 6.2 Solidarity Group Lending -- Figure 6.3 Grameen Centre -- Figure 6.4 Self-help Group -- Figure 6.5 Village Banking Model -- Figure 7.1 Estimating Potential Demand for Housing Microfinance Services -- Figure 8.1 Economic Vulnerabilities -- Fig ure 8.2 Microenterprise Credit and Emergency Loans: Two Sides of the Same Coin -- Figure 8.3 Income Smoothing -- Figure 8.4 Coping with Economic Stresses -- Figure 9.1 Credit, Savings, or Insurance? -- Figure 10.1 The Standard Lease Operation -- Figure 10.2 Supply Chain Leasing -- Figure 11.1 Building Blocks of a Money Transfer System.

Figure 11.2 Primary Activities of the Money Transfer Value Chain -- Figure 11.3 Evolution of Financial Service Needs after Migration to the United States -- Figure 14.1 Integrated Services for People with Disabilities -- Figure 14.2 Sample PPI Scoring -- Figure 14.3 Calculating the Percentage of Clients Who Fall Below the Poverty Line -- Figure 15.1 Degrees of Poverty -- Figure 15.2 Microenterprise Development and the Three Types of Capital -- Figure 15.3 Microfinance for the Poorest of the Poor -- Figure 17.1 Microfinance and Women's Empowerment: Virtuous Spirals -- Figure 17.2 Livelihood Road Journey -- Figure 18.1 Post-Crisis Product Mix -- Figure 19.1 Musharaka (partnership) -- Figure 19.2 Mudaraba (trust financing) -- Figure 20.1 Relationship between Rural, Agricultural and Micro Finance -- Figure 20.2 Value Chain Actors -- Figure 21.1 Gen eralized Illustration of the "Missing Middle" -- Figure 21.2 Differing Perceptions of the SME Challenge -- Figure 21.3 Risk Management Practices of Banks Serving SMEs -- Figure 22.1 Types of Partnership by Degree of Engagement -- Figure 22.2 The Partnering Cycle -- Figure 22.3 Communication Activities in the Partnering Process -- Figure 22.4 Step-by-Step Planning Process for an MFI-Bank Partnership -- Figure 22.5 FINCA's Carta Inteligente -- Figure 23.1 Strategies for Shaping the Institutional Culture -- Figure 23.3 Product Branding at BancoSol, Mibanco and Tameer Micro Finance Bank -- Figure 23.4 Sales Strategies -- Figure 23.5 Four Functions of an Information Management System -- Figure 24.1 Strategy Formulation -- Figure 24.2 Product Life Cycle -- Figure 24.3 Value Analysis from the Clients' Perspective -- Figure 24.4 Operational and Strategic Budgets -- Figure 24.5 Sample Risk vs. Return Bubble Diagram -- Figure 24.6 Clients Served -- Figure 24.7 Accounts Opened per Month -- Tables.

Table 1.1 Categories and Purposes of Financial Sevices for Low-income Clients.