Improving customer life time value through cash loans as a retention offer.
2023
Role
Lead Product Designer
Team
Product Manager, Data Analysts, Developers, Commercial team
Duration
6-9 months to launch
At a Glance
Over 500 million financially excluded African adults lack access to traditional banking services.
With more than 5M customers,
M-KOPA provides fair and flexible financial solutions tailored to customer needs, backed by a decade of experience and successful customer repayment.
About cash loans
Cash loans were piloted as a retention offer to give more value to customers and reduce churn rate for customers that are paying well and are done paying off their phone loans.
Based on the customer’s repayment rate, they could be eligible for either upsell (taken while paying for the phone) or upgrade (taken after paying for the phone) loans.
Empathising
The challenge
How might we offer customers more value on top of their phone to improve retention?
Specific goals
Offer a sustainable retention products for customers done with the primary payment.
Improve customer overall repayment rates and get closer to defining credit scores.
Offer customers more value without the need for new collateral.
Improve bookings and customer LTV through retention product.
The solution
Offer in-app cash loans for eligible customers
Offer cash loans through the M-KOPA app.
Reduce disbursement time significantly.
Increase app usage.
Improve customer satisfaction.
Key metrics *
20%
Improve customer retention by 20%.
45%
Improve cash loan conversion rates by 45%.
2X
Improve daily cash loans sales by 2X.
25%
Improve disbursement rates by 25%.
*Percentages are close estimates
A video walkthrough of the USSD experience
A great pilot. Loads of learnings
Initially, applying for a cash loan via a USSD menu required 13 clicks.
Buying airtime today via USSD from Airtel Uganda
Challenges with USSD cash loans
The USSD experience took more than 13 steps to apply for a cash loan with no assurance the funds would be deposited that day.
Long USSD steps
No beneficiary validation
Slow disbursement
Exploring the problem space
Problem discovery
Hypothesis
Introducing the cash loan application experience in-app will improve retention, app stickiness and a better experience leading to increased retention sales.
Goal
Improve the experience of cash loan disbursement from days to minutes and hence encourage retention sales.
Research
Research spanning several months involved several teams; customer insights, data analytics, data science, legal, design, commercial and several other teams.
Research
Happened over a long long period. More than 6 months before pilot launch.
Extensive interviews
With various stakeholders internal and external.
Surveys & Analytics.
With dedicated teams to analyse data and trends.
A group of M-KOPA customers pose for a photo after a focus group discussion on cash loans
Insights from the research
At a high level, these were the most important insights
85%
Trust is king with financial offers.
Inconsistencies in eligibility, loan terms and slow disbursement led to high drop-off rates. Over 80% of customers expressed distrust.
95%
Nobody reads Terms & Conditions.
With phone locking tied to the cash loan, reading terms and conditions was crucial. However, over 90% skipped them.
80%
USSD experience is painful compared to competition.
80% of customers were dissatisfied with the USSD experience. Cash loans via USSD were not competitive.
It takes more than 2 days to receive a small amount of money. This befits the whole purpose of borrowing.
Small business trader in Kitisuru, Kenya
Persona - Gladyse
Goals
Access to quick finances even without credit history.
Ability to know exactly when she is eligible and how much she can get.
Useful information in case she is not eligible.
Pain points
Access to cash loans require a lot of financial details.
Lack of substantial collateral to acquire a sizeable loan.
The process of actual disbursement is so slow.
Scenario
Gregory uses her M-KOPA phone to keep track of her clothes shop business. From sharing images with customers, to directions, sharing content and even receiving payments.
Despite the good business, she often has “emergency” days that need more capital than usual. This is when she needs cash loans the most.
Popular apps
WhatsApp, Youtube, Instagram, Tiktok
Credit: Stock image from Unsplash
Prioritisation
Based on all research, this was how priority was defined
Conceptualizing & Validating
Cash loans user flow
After several rounds of defining and iterating on flows we set out to launch with this, despite a few challenges we were aware of.
High level focus on 4 main areas.
Discovery
Navigation
Sufficient details
Ineligibility
Iterations
We did a lot of iterating to define the MVP through v2.
23
More than 23 rounds of validations across Kenya, Uganda & Ghana
28
An average of 28 customers per round of validations.
5K
More than 5,000 customers reached through surveys and interviews
6
At least 6 design review sessions to refine designs and the flow.
Left: An M-KOPA customer with some swag after user testing sessions, Right: a screen showing the home page
In-app cash loans
How to apply for and get a cash loan from the M-KOPA app for an eligible customer.
Try out the in-app cash loan experience in the prototype
Prototype section
Click the prototype to interact