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Scope Of Mobile App In The Age Of Shifting Customer Goalposts In The Microfinance Sector

Harshavardan Patnaik,SVP - Head of Central Operations & Alliance Business,Arohan

Women in rural India have arrived. They have broken many a myth. They are assertive, empowered, aspiring and increasingly financially independent. The rural millennial woman will buy the best that her money can buy, will make an independent choice and most likely will buy a brand that is trusted. This is the new psychographic of the rural woman.

Over the last two years, there has been a phenomenal transformation in the way this segment has embraced the internet. Affordable smartphones and cheap connectivity has transformed the way they connect and relate with the world. Telecom companies were in for a surprise more than a decade back when rural people saw great value in basic mobile telephony and returned huge subscriptions. History repeats with 4G subscriptions in rural India. Not surprising…while in the former getting connected enhanced ‘livelihood’, the latter enhanced ‘quality of life’. Information asymmetry, knowledge assimilation, entertainment needs, social networking are all getting addressed. It is therefore, not surprising that marketers have made a beeline to exploit the increasing ‘on-screen’ time of the rural women.

MFIs have been cross-selling products to customers for over a decade now. What started as offering access to brands having rural-centric products has now evolved into an important line of business. However, with time fatigue has set in, for all players offer similar products and customers have had one too many of them. The past three years have witnessed a major shift in borrower behavior. A new normal has set in with respect to delinquency which is significantly larger than pre-DeMo days. The loan officer is increasingly focused on collections, thus ensuring that his/her portfolio does not come under stress. Consequently, less time is available for cross-sell and thus, slowly the process is getting relegated to the backseat.

There is a need to reinvent to address this issue. Is a mobile app the solution… yes for sure! Should it be for shopping/placing order, for financial

inclusion or for transacting and checking eligibility for new/repeat loans? An omni app would be ideal for the microfinance customers.

Where does one begin? Undoubtedly it has to be centered around the core microfinance transactions. If on logging in the customer gets to see her loan ledger and details of the loans (current and past) - this core would ensure there is stickiness. The customers would be encouraged to check the posting of her latest repayment and that would be of great assurance. The next level would be to have the customer check her new loan eligibility or better still if the app were to show ‘pre-approved’ limits, further enhance stickiness.

Audio visuals on the USP of the product, benefit to health & environment and instructions for use would truly engage the customers and in turn catalyse a purchase decision

Once the basics are in place, the app can now be made more engaging with the shopping section. MFIs can have a section for customers to browse through the products that are on offer. In several cases the products need concept selling - for instance, a water purifier or a smokeless stove. Audio visuals on the USP of the product, benefit to health and environment and instructions for use would truly engage the customers and in turn catalyse a purchase decision. The customer could place the order on cash-down basis or apply for a consumer durable loan. With financial inclusion and mBanking already in vogue the former can be fulfilled through digital payments. For the latter, her finance request would take the normal credit appraisal route from the app. The logistics company can integrate their API to the App to enable the customer track the shipment pretty much like what a mainstream ecommerce player would do.

Making the app further engaging, a loyalty programme can ride on this platform. Loyalty points for attendance in centre meeting, for repeat loan, for referring customers for loans and or product sales, for embracing digital repayments and so on…. the list is truly endless.

And that is not all. The app can be made even more engaging. She can share her success, say of an enterprise that she set up or expanded from the loan availed from the MFI. She could even share how she picked a new skill and encourage others to try the same. Maybe here the likes can convert into loyalty points.

Having reached thus far and managed a few lakh active users would herald the phase of monetizing the asset. The burn can finally end here. Access to an empowered customer base such as this would be any marketer’s delight. They would be all too happy to invest in the adspace, redirect hooks and so on. Rapid and dipstick surveys for customer insights to feed marketing strategies too is a possibility. That is not all, this set is a great base for social marketing for health and hygiene; dissemination of information of public importance such as government programmes and so on.

In all there is a strong case for a mobile app which is completely focused on the rural microfinance clientele and that, in my view, will bring ‘more power to them’ – an empowered foundation is the key to a strengthened socio-economic pyramid.

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