Although the products were launched as pilots during a time when the market and customers were facing challenges from a pandemic, initial results suggest that the products have positive impact on users’ financial health. Data suggests that timely credit, tailored advice and training, and enhanced user experiences can improve customers’ overall financial well-being.

Leveraging distributor intelligence for small business credit 

Located in central Mexico, cooperative Caja Bienestar partnered with Accion to develop a product to appeal to micro businesses. Initial research with business owners revealed they are more comfortable taking credit from their suppliers, who allow them rotating credit, to repay once they have made sales, and without complex paperwork or collateral. Recognizing the power of the relationships and data that suppliers have with and from small businesses, the Accion and Bienestar teams worked with suppliers and distributors to pre-approve micro-entrepreneurs. The resulting loan is much like the credit shopkeepers receive from distributors, featuring a fee (rather than interest rates), an open line of credit, and flexible repayment schedules.

During the pilot, the product had 14 active users, each of whom received an average of 18 rounds of credit. The percentage of users who said their financial situation caused them stress decreased by nearly 10 percent during the pilot.

Crafting an app to engage youth in savings 

Caja Popular Cerano was experiencing low rates of engagement among youth and partnered with Accion to conduct in-depth interviews with students, part-time workers, and self-employed individuals. The research found that youth think about their financial lives in short horizons, planning how to get through the week, rather than thinking about the future. The research also uncovered that 40 percent of young people noted that they spend more than four hours a day on the internet.

The team helped Caja Popular Cerano build AlianzApp, an application that allows youth to work toward their goals by putting money into savings or by taking out very small loans. The app includes an avatar to engage users, motivational messages, and automatic deductions and payments to ease usage. AlianzApp is expected to launch in 2022.

Redesigning financial management for a personalized digital experience

Destácame is a personal financial management platform that helps people access financial products and services. On the Destácame website, users can review their credit reports free of charge, access discounted options to pay off debt, review product offers from different entities, and learn tips to improve their financial situation. With Accion, the Destácame team revamped and expanded the platform to allow customers to set, visualize, and work toward their financial goals through simple diagnostics, personalized user journeys, and digestible tips, tools, and product recommendations.

Since launching in early 2020, over 1.25 million users in Chile and Mexico have visited the redesigned site. Almost 65,000 have completed the diagnostic,128,000 have accessed the budgeting tool, and 30,000 have accessed the expense reduction tool. Our survey found that the group of people reporting they are satisfied with their financial situation grew by 23 percent.

Digitizing small business operations via a gamified app

Fundación Banigualdad, a nonprofit that helps low-income microentrepreneurs access financial services, partnered with Organizame, a company that helps small businesses digitally track their sales and expenses and issue electronic invoices. The two organizations worked with Accion to develop a business management app to help Banigualdad’s informal, low-income clients digitize their business operations. The app consolidates their business transactions and calculates monthly profits and includes gamified tutorials.

Five months after launch, the app has been downloaded 1,660 times and 543 users have completed the tutorials. Users of the platform reported a 17 percent increase in their satisfaction with their financial situation, while those that did not use the platform only reported a 5 percent increase.

Tailoring digital credit for small businesses

RedCapital is a platform where individual investors can lend money to micro, small and medium enterprises (MSMEs). Accion helped RedCapital redesign their platform and digital customer experience to better serve microenterprises. The team adapted the platform’s processes, credit-scoring methodology, pricing, and customer journey to support microentrepreneurs. They also created business management lessons and a chatbot to build users’ financial health.

By the end of the pilot program, 305 MSMEs have received financing through RedCapital, and over 2,600 are registered on the platform. Among customers who received credit from RedCapital, those who reported satisfaction with their financial lives grew by 15 percent, whereas the group of satisfied people among those who didn’t receive a loan decreased by 14 percent.

In all, we believe that well-designed financial products can truly benefit customers; entrepreneurs will be better able to hire more employees, parents can more easily save for the future, and communities everywhere will be able to accelerate social and economic progress. However, for these benefits to take shape, we must develop financial health products that are rooted in the behaviors, knowledge, skills, and attitudes of the customers who use them.

Read more about the insights we learned from this project in our new paper, How providers can build products that improve financial health: Examples from Mexico and Chile.