A first look at technology provider market share

The just-announced transition of the software listings from CGAP to the MIX Market site gives us a good opportunity to explore one way in which integrating technology providers and MFI data can open up new information for microfinance practitioners.
 
Over the past 10 years, CGAP has reviewed the products of many of the leading technology providers. During the review process, CGAP collected client lists from those providers to better understand their market and to gather feedback from clients about the vendors. As part of this transition, we’ve migrated the lists for 24 firms rated by CGAP in 2009 – 2010 to the MIX Market site. Overall, the reviews yielded over 1000 client-vendor relationships for the firms in question, although even a list this extensive is still incomplete. (See this note on the data for more.)

When information on clients is available, you can now view those lists on the MIX Market site. For example, within the profile for MFSI, if you scroll to the ‘relationships’ section, you can see their list of clients:

Similarly, you can also see if an MFI is working with a particular technology provider. Since FINCA - GTM is a client of MFSI, if we go to the ‘Partnerships’ section of their profile, MFSI shows up there as well:

You can even subscribe to an RSS feed of a vendor's clients if you wish.

One thing we’d like to do is to better understand the market for technology providers. Many practitioners have a sense that the landscape of technology providers for the microfinance world is fragmented – lots of small providers, with no clear dominant firms. We can now use the integrated data to take a first pass at market share for this group of firms. (Again, this is not all vendors or all clients, as there are many firms that were not reviewed and many firms that did not disclose full client lists.) 

To start, let’s count the number of clients per vendor. That tells us which firms (again, among those reviewed) have the most clients. A graph of this measure of market share is below. We can see that four products have broader client bases, with a bit of a drop and then slow decline in outreach for the next twenty vendors.

In addition, we know (or think?) that some vendors target particular regions, so if we dig one level deeper we can see if the market share varies by region. 

And indeed, it does look like this is the case – the graph shows us that Loan Performer and Finance Solutions are concentrated in Africa, MBWin in Asia and Emortelle in Latin America, while other vendors are either diversified across more regions or have smaller shares in general.

We can even imagine taking this one step deeper – does one product dominate Francophone vs. Anglophone (vs. Lusophone…) Africa? Do some products have a particularly strong footprint in one country or another? At MIX, we are going to place a particular focus on technology providers with a footprint in Africa as we work to better understand and streamline information flows within microfinance sectors in Africa.

In the future, we’d like to explore more similar views on the data. The data above tells us who has the most clients, but doesn’t tell us much about those clients. Which vendors work with the MFIs with the largest outreach? We know that some vendors have a specialization in small MFIs or rural MFIs or credit-only or savings-led MFIs. Can this data tell us more about what a ‘typical’ client of a vendor looks like? Now that we have the vendor data integrated with MFI outreach data, we can begin to make these distinctions.

We hope that answering these types of questions will help MFIs to find better services and help vendors to differentiate their products in the market. However, we know that transparency (especially in a competitive industry) is always a work in progress. Many vendors currently disclose detailed lists of clients, while others have less public information. We believe that in the long run integrating this type of information can help both buyers and sellers of technology services.

If you are a technology provider or MFI and would like to update this information for your organization on the MIX Market site, you can do the following: For vendors or MFIs with existing profiles, you can use the change request button () in the upper-right corner of each profile page. Otherwise, we encourage you to use the MIX Market contact form which will directly route a case to MIX staff for prompt resolution.

A note on the data:  Some providers only provided lists of a subset of their clients, while one provider did not provide any data on clients as part of the review process. Consequently, any results from this should take into consideration that data is incomplete and unevenly distributed across firms.