Turning Insights into Products: Applab Money

CGAP, Grameen Foundation and MTN Uganda are introducing Grameen Foundation’s AppLab Money Incubator, a new initiative that develops mobile financial products for the poor. In this blog post, Project Manager Olga Morawczynski and Operations and Strategy Manager Lisa Kienzle introduce AppLab Money and explain how customer insights will be transformed into viable products offered by MTN Uganda. 

If we want to move the mobile financial services sector beyond payments and create products that reach every level of society, we have to be creative. The industry requires product innovation that focuses on customer desires, use patterns, and needs, and then translates these findings into viable products. In Uganda, Grameen Foundation’s AppLab is partnering with MTN and CGAP to do this by launching a product incubator: AppLab Money.

At AppLab Money, we will dedicate 100% of our time and resources to researching, prototyping and testing innovative products in line with AppLab’s approach to sustainable product development. Our agreement with MTN Uganda enables us to sit in MTN’s office, test on its network, analyze the company’s data and swap ideas with its staff. If we find that there is demand for a product that is commercially viable for MTN, we will work to scale it in Uganda.

The key to innovation is a strong research process, and AppLab Money uses several complementary research methods to understand the financial lives of the poor. Data mining and surveys help us make generalizations about the needs and habits of potential customers. Financial diaries and ethnographic methods allow us to determine why such habits exist. What follows is one example of an interesting insight that emerged on a recent field visit that could be translated into a product that poor customers could find exciting: on our trip, we noticed that everyone loves gambling.

While visiting a village in East Africa, we met a farmer named Arthur who enjoyed gambling in his spare time. We watched him spend $2 as an entrance fee to join three other players in a popular board game called Ludo (see photo). Arthur lost this round, and the entire pot of $8 was handed over to his neighbor. When asked why he played if there was a risk of loss, Arthur explained that the potential returns were very high – in fact, it would take him one week of intensive labor (such as digging on his neighbor’s farm) to earn what he could win from one round of Ludo. If he won the pot, he would set aside half as an “emergency fund” for his family to protect against shocks – such as an unexpected illness – and reinvest the rest into the game.

Many institutions have found success in leveraging the excitement of a game by offering prized-linked savings products (examples include FNB Bank’s million a month account (MAMA) in South Africa, savings lotteries in Detroit, or Kim Wilson’s summary of prize linked savings accounts). So imagine if Arthur had access to a formal financial product that provided what he needed (a safeguard against health emergencies) but also gave him what he wanted (the sensation of a game). What if Arthur could access health insurance that was structured like a lottery?

It might look like this: Each month, about $2 (the same it would cost him to play one round of Ludo) would be deducted from his mobile money wallet as his insurance premium. A portion of the premium would be allocated toward a lottery fund, which would pay out monthly and annual cash prizes via mobile money. Even if Arthur did not win the big prize, he would still protect himself and his family against health shocks.

Entering the lottery space would certainly be a gamble, but it is just one of the many ideas that we are looking into at Applab Money. If we want to create products that are useful and that excite the hearts and minds of our target market, we have to start pushing boundaries. A good first step is to ensure that the process of innovation is exciting for all players involved, especially the poor users we hope to capture.

As a part of our product innovation process, we want everyone to be involved. The AppLab Money Incubator has launched an open innovation platform to crowdsource ideas for new mobile money products. If you have an idea you think we should test, or if you want to help us decide what ideas we should pilot, please check out our challenge page to submit your concept or vote on ideas that others have submitted. We look forward to tackling this challenge with you!