Combining quantitative and participatory methods in conjoint analysis - Designing microsavings in Northern Vietnam

More and more microfinance institutions have come to recognize the need to provide microsavings services both as a much-valued service by their clients and as a long-term source of refinancing capital for themselves. This has led to growing interest in savings, referred to by Vogel (1984) as the 'forgotten half' of microfinance. Empirical research has shown that the rural poor save financially. Nevertheless, savings services must be designed appropriately to respond to the poor's demand characteristics. Savings in Vietnam were boosted during the last decade. However, this development has bypassed rural areas. The Vietnam Bank for Agriculture and Rural Development (VBARD) is the only supplier of savings schemes in rural areas. However, savings services of the VBARD are not attractive to rural clients. Yet, Vietnam's rural population has a true demand for microsavings services; they need to be still further developed. The development of demand driven microfinance services requires the involvement of the rural poor by participatory research methods. Conjoint Analysis (CA) is a marketing research method that combines quantitative and qualitative aspects and requires involving the potential clients in a participatory process at different stages of the research process. The stages and intensity of target group involvement in the CA will be analyzed and policy recommendations for the design of demand driven micro-savings schemes will be discussed. The results of this paper strongly support the view that rural households in developing countries, even the poor and poorest, demand microsavings services. This finding contrasts the Vietnamese government's and the formal financial sector's views.