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Overview
Imagine a local bakery needing funds to upgrade equipment or a retail store looking to stock up for the holiday season. For many small businesses, accessing quick and affordable financing is a constant challenge. Traditional loans are often slow, complicated, and require high collateral, leaving many business owners frustrated.
We set out to solve this problem with a web application that simplifies the financing process. The platform allows small business owners to apply for and manage low-collateral credit lines, track applications in real time, and secure the funds they need to grow—all in a user-friendly and efficient way.
What research should us about the problem
In an extensive user research initiative, we focused on interviewing Small and Medium Business (SMB) owners across Karachi, Lahore, and Islamabad, Pakistan.
With the assistance of our dedicated User Research team, we embarked on a journey to deeply understand the financial challenges and preferences of these businesses.
This collaborative effort was instrumental in uncovering the nuanced financial needs and obstacles faced by SMBs in these regions, leading to the following insights:
Key Insights
Extended Processing Times
Traditional financial institutions often have processing times exceeding 2-3 months, a significant barrier for customers in need of swift solutions like invoice financing.
Lack of Transparency
A history of opaque dealings has left many users wary of applying for financing through banks, emphasizing the need for clear and detailed financial information.
Preference for Flexibility
The study revealed a strong preference among many users for borrowing from friends and family, valuing the repayment flexibility that formal financial channels typically lack.
Banks' Focus on Government Lending
Banks prefer lending to the government to avoid the exhaustive effort of KYC and credit checks, leaving businesses further alienated from much-needed financing.
What Our Offline Pilot Mode for Financing Showed Us
To ensure our solution addressed real user needs and operational pain points, we conducted an offline pilot test, followed by a detailed process-mapping session with the operational team. This collaborative approach not only validated our initial research but also revealed deeper insights critical for designing a scalable and user-friendly product.
Key Insights from Process Mapping
Fragmented Customer Journey
Mapping the financing process highlighted inconsistencies across key phases—acquisition, onboarding, loan management, and repayment. These gaps often led to user confusion, delays, and frustration, especially during onboarding when multiple touchpoints required repetitive document submissions.
Operational Bottlenecks
We identified significant delays stemming from manual processes, particularly in the verification and approval stages. The team flagged these as scalability challenges that could hinder smooth operations as the user base grows.
Missed Communication Opportunities
Throughout the process, users often experienced a lack of proactive updates, leaving them anxious and uncertain about the status of their applications. Mapping these touchpoints revealed opportunities to improve transparency with timely notifications and progress tracking.
Emotional Friction
The process mapping also captured the emotional states of users at different stages, including confusion during application submission and anxiety around repayment tracking. These findings reinforced the need for a solution that provides clarity and reassurance at critical moments.
Scalability Barriers
The exercise brought to light operational redundancies, such as repeated data collection and limited integration between internal systems. These issues, if left unaddressed, would impede the platform's ability to handle a growing volume of applications efficiently.
Islamic Compliance as a Differentiator
A recurring theme from the operational team's observations was the importance of offering Islamic-compliant financing options. This feature not only addresses a significant market need but also builds trust among businesses seeking ethical funding solutions.
User Needs Statement
Following our in-depth ideation process, where we closely examined customer profiles and their financial hurdles, our team was able to distill the complex array of insights into a clear, focused needs statement. This statement captures the essence of what we discovered to be a pivotal requirement among our target users.
Needs Statement:
An established SME has a need for capital injection and support addressed by a Islamic financing option.
User Persona
To better understand the needs and challenges of our target audience, we developed a detailed user persona based on our research and insights.
This persona represents the typical small business owner navigating the complexities of financing, helping us design a solution that aligns with their values, goals, and pain points.
Competitor Analysis
To gain a deeper understanding of the market and examine how lending products gather information and conduct KYC, we conducted a competitor analysis. This analysis yielded several key insights and themes:
Competitors provide detailed financing information upfront on their landing pages.
They employ a well-defined initial onboarding questionnaire designed to avoid overwhelming users.
They offer visibility on application status to minimize user confusion.
The entire process from document verification to contract signing is handled online, eliminating the need for manual interventions.
Wireframes
We created low-fidelity wireframes for the marketing landing page and the product, focusing on clarity and usability. The landing page highlighted the value proposition, while the product design ensured seamless navigation for applying, tracking, and managing financing. These wireframes laid the foundation for user-focused, functional designs.
High Fidelity Designs
Building on the wireframes, the high-fidelity designs brought the platform to life with polished visuals, refined layouts, and a focus on user experience. These designs ensured the marketing landing page effectively communicated trust and value, while the product interface offered a seamless, intuitive experience for managing financing.
Landing Page
Allowing users to get upfront details about the financing products and eligibility process to allow them the ability to understand the product better.
KYC Information & Document Gathering
After initial signup, a fast KYC information and business documentation gathering process was required to verify the authenticity of business and ownership details.
Financing Details Verification
The next step in the process is the verification of past financial records to understand viability of financing businesses and to do credit underwriting.
Contract Signing & Dashboard
After first contract signing, a dashboard is created for the user to see their current Credit limit and financing details alongwith the option of seeing history and for newer financing applications.
Additional Screens
Learnings and Next Steps
Now that the basic infrastructure of financing for SMEs is up and running, some things to ponder that were shared with the team were:
Key Insights:
Recognize and cater to the unique requirements of various business types by tailoring products specifically for them.
Transition to a standardized credit scoring model for businesses to improve scalability.
Collaborate with the Data team to enhance infrastructure, focusing on automations that eliminate the need for manual verification processes.
What could have been done better:
Usability testing could prevent problems in user journeys. Nonetheless, we can effectively monitor outcomes and understand product adoption through event tracking after launch.