What We’ve Learned about Online Lending
One of the things I’ve learned working in microfinance (actually, working period) is that effective, well thought out technology is crucial to every aspect of an organization, but especially in the ability to achieve scale. This fact is particularly glaring in regards to ACCION USA’s “OLA” – our online loan application – that serves as our primary lending tool everywhere outside of our core service areas and gives borrowers in existing markets an easy way to apply.
ACCION USA pioneered online microfinance lending in 2005 with the original launch of the OLA—it was a bright, shiny new piece of technology, and was instrumental in helping us increase microloan access in the U.S. (It even earned the Innovation in Technology Award from the Association for Enterprise Opportunity). But five years is a lifetime on the Web, and today, the application is riddled with challenges that we’re hoping to work through in an up coming re-launch.
Website usability experts and the microfinance community in general might be interested in what we’re learning along the way:
- Simple design is good design. Our core concern was designing a tool that would effectively serve individuals with varying levels of Internet literacy. What we discovered was that users across the internet-knowledge spectrum all appreciate the same thing: good, intuitive design. Think Google, whose bare bones, yet eerily intuitive platforms are virtually universal.
- Keep it simple, stupid (KISS). We’re applying KISS, the age-old marketing adage, to every word we write. The microfinance industry is so full of jargon that most practitioners no longer realize that phrases like “debt-to-income ratio” and “overextended credit” don’t mean much to typical borrowers (or maybe just this blogger). We’re being careful to use the words our borrowers use, making the application far less intimidating.
- Technology can be personal. Internet and remote lending is often criticized due to its lack of personal touch, a concept widely regarded as critical to maintaining high repayment rates. With that in mind, we’re making the online application process as personal as possible—my favorite new OLA feature is the financial education “prescription” that will be generated for each new loan applicant whether they are approved or denied.
We’re due to re-launch this summer so stay tuned!
P.S.… Our amazing consultants on the OLA relaunch project, the team at Addventures, taught us everything we know.
March 3rd, 2010 at 11:47 am
I’ve always thought of ACCION USA as a traditional Microlender– this post is such fresh breath and is cleary innovative. Can’t wait to see it finished. There are so many ways to bring this microloan applciation to the Mainstreet America.