Loan App for the low-income group — Design Case Study
What makes your life easy?
Have you ever seen a common man struggling to make both his ends meet even after working day and night? When you talk to them, you realise they have been annoyed or tired of switching between their roles and fulfilling a family need.
I have heard of people wishing for getting money at the start of the month rather than the last day or maybe in the first week of next month. They believe this extra money in hand might solve their problems. Of course, I cannot change the pattern of their employers because they have their own reasons and logic.
This project is a quick loan solution that allows users to get loans quickly without going to banks. It also opens up new possibilities for users to get loans up to Rs 20,000 at no cost and payback later — helping them continue their life instantly.
You might have thought of why not use credit cards instead-but…
Problem
Users struggle with several usability issues
User feedback indicated that they bought items usually in cash and the idea of using a credit card was difficult for them because they have to pay some regular prices to even use the service. There was also an opportunity to miss the deadlines on their own while this application can send them a reminder.
How do people borrow money currently?
- Bank loans
- Friends
- Family
Scope
User: People aged 20–40 years old who are using mobile phones but lie below the taxable income.
Market: Young smartphone using population
Themes and insights
A 2019 Borrowing Behaviour report from Bristol University gave tremendous insight into how income group differs user behaviour towards loans.
- Homeowners have higher levels of borrowing than non-homeowners
- Credit limit increases on credit cards making users feel they are in control but leading them into a death-trap of loans and repayment
- Low-income households are less likely to use consumer credit than those on higher incomes. When they do borrow, it is often to make ends meet and pay for essentials; and they are more likely to use high-cost lenders.
I took these three points as assumptions while deciding the flow as they are mostly expected to work for a large audience as they are based upon the research.
Design Process
To stick away from going deep into the inspiration and building a solution from the structure has not been very productive because somewhere, users’ issues and challenges remain untouched in that.
The design process is the cure:
- It serves as a checklist to make me stick on a reliable path with enough freedom to explore new dimensions
- It ensures users demands are met while sticking on the industry lines
Concept Background
But why would I want to loan from a company, rather than going to a bank because money is still a very intimate subject and people don’t want to weird out by taking loans from a bank for just a few days because taking loans requires a lot of processes and takes time?
The other alternative was to loan from family or a friend but we don’t because they are usually opened ended without very clear discussions making things difficult when you face them next time. Besides, it could damage your relationship because it creates tension whenever you see them and you feel like you owe them a lot more than money.
“As my father used to say: “There are two sure ways to lose a friend, one is to borrow, the other to lend.”
― Patrick Rothfuss, The name of Wind
Through this project, we sought to explore how we can get loans quickly without worrying about more things than repaying and carrying on their lives more effectively. Specifically focusing on the next billion users because they have a lot of problems due to money, which could be solved without getting disrespected. They work very hard to maintain and improve their lifestyle. The aim is to execute humans first approach because taking a loan or talking about your financial status is still taboo.
Research
I wanted to know more about the issue and hence, the idea was to explore the profile from different perspectives to remove all the biases and to work through the data.
Project Goals
- Increase ease of taking loans
- Create application targeting to waged employees below 2.5 LPA annual income
- Clarify value propositions and how the service works
- The design should be target oriented not distracting users from the utility and making it simple to use
- Balancing the user expectations of urgency and time required for transfer
Pain Point for user
- Bank visitation for many tasks — passbook updation, mobile or email id updation, changing branch
- KYC related issue: For this particular age group many of the records are not properly maintained or some other issue.
- Not acquainted with mobile banking
- Low belief or trust in new-age technology
Design System
I used a structural design system as it helped in deciding upon and creating the elements at scale. It helped me to not strain on structure but focus upon large problems at hand and I thought upon all the elements before choosing one at priority.
It helped me in deciding upon which element to be used here and gave me a thought of deciding upon the priority of elements.
Design
How might we simplify the process for getting quick loans?
The old credit card model involved several steps and never reminded them to pay back the money. What if we create an application that focuses on borrowing and lending only so the user doesn’t get distracted?
After carrying out desk research and user interviews, a few sets of design principles were standing out loud and clear which I kept in mind while designing to maintain the direct relationship between the interview result and our UI design.
1. Seamless integration
Each user has unique habits to use the application so putting up loaning and borrowing features upfront to enhance their experience without any complicated steps.
2. Simple
The intact background of this app is simple to use. The users need not learn a new pattern.
3. Accessible
The design should be beneficial and accessible to the user. There should be no insignificant disturbances with many notifications.
In the phase of brainstorming and ideation, I identified the problems and defined the users to be waged employees with income below taxable income. Also, the aim was to create a simple user-centred design application that can minimise the hassle of a user when they want loans, it helps them to create a seem-less flow for exploring and getting quick returns.
Easy Discoverability
Design solution: Added two entry points on the dashboard to request loans or view their active loans to enhance its visibility and make the choice more apparent through the card.
Get Loans Feature
Another user-friendly solution is the feature “Get loans” card: it selects the option for quick loans from a user. And this converts into a list of loans. Right from the home, users can add loans to their accounts. Its screen shows the list of active loans.
Why no search feature?
Since features of the utility are upfront, I have used Pareto Principle for decision-making. It states that “roughly 80% of the effects come from 20% of the causes.” In case of the need, it can be added on top upfront as just an icon without a search field because all the major aspects of the application are upfront which users can find without remembering.
Takeaways
While working on this project, I went from traditional banking apps to all the new banking services in hand with a powerful and convenient target audience. I entered into a loop of trials hoping that users develop an interest in this and why would this help them.
What can I do better?
- Research about the features and results of competitors.
- Select participants from different areas.
- Usability test of the prototype with users.
- Design direction.
