Solving a product challenge by mpokket. It contains detailed solutions and an analysis of why we need to do it. mPokket provides small ticket short duration loans to college students via its mobile app. There are currently 3 loan amounts - Rs 500, Rs 1000, Rs 2000 – available for tenures of 1,2 and 3 months. The loan amount along with the principal is to be paid back at the end of the tenure. mPokket assigns a credit limit to each user and at any given time they can take one or more loans up to that limit. mPokket is considering launching an EMI feature, where users can repay in monthly installments. In this context please think about the following. Note that the thought process and structure are the most important evaluation criteria. 1. Should mPokket introduce an EMI feature? What are the pros and cons vs. the current offering? 2. What specific parameters (ticket size, tenure, etc.) do you propose for the EMI feature? 3. Provides examples of the user journey 4. The current backend systems and analytics are built around the current bullet repayment structure. What changes do you think introducing an EMI feature requires in the backend systems? 5. What success metrics would you use to measure?

1. Assignment 1:
mPokket provides small ticket short duration loans to college students via its mobile
app. There are currently 3 loan amounts - Rs 500, Rs 1000, Rs 2000 – available for
tenures of 1,2 and 3 months. The loan amount along with the principal is to be paid
back at the end of the tenure. mPokket assigns a credit limit to each user and at any
given time they can take one or more loans up to that limit.
mPokket is considering launching an EMI feature, where users can repay in monthly
instalments. In this context please think about the following. Note that the thought
process and structure are the most important evaluation criteria.
1. Should mPokket introduce an EMI feature? What are the pros and cons vs. the
current offering?
2. What specific parameters (ticket size, tenure, etc.) do you propose for the EMI
feature?
3. Provides examples of the user journey
4. The current backend systems and analytics are built around the current bullet
repayment structure. What changes do you think introducing an EMI feature requires
in the backend systems?
5. What success metrics would you use to measure?
Note: The questions are broad on purpose. You are required to take assumptions and
based on that come up with the solution

2. Our objective
The primary goal of mPokket is to financially empower the youth of our country. By
providing small to medium-sized loans for students and young professionals, we enable
them to become financially independent at an early age.
The reason why we are one of the best instant loan apps in India is two-fold. Our
customers have always found our interface to be user-friendly and enticing. The
registration process is simple and comprises only a handful of steps.
Customer Segment:
College-Student, Young professionals
Maximum Loan Amount:
For college-goers, the maximum loan amount is Rs 20,000.
For young professionals, the maximum personal loan amount is Rs 30,000.
What is EMI feature?
An equated monthly instalment (EMI) is a set monthly payment provided by a borrower to
a creditor on a set day, each month. EMIs apply to both interest and principal each month,
and the loan is paid off in full over some years.
The flat rate method is used for payment.
Role Young Professional started his job in small town with small salary (Mukesh)
Job Electrical Technician
Goal Looking for borrow money without long application process to fulfill his
family urgent needs. He is looking to borrow fair amount and it should have
flexible payment option. His brother and sister are studying, and parents
are getting old, so in future he might need a bigger loan to satisfy all their
needs.
Frustration Paying off personal loans in full is critical since other financial obligations
can otherwise encroach on this money. In due date, I will extend my loan
and pay extra, which is additional burden. Paying in small installment, will
keep spend in limit. Mpokket do not have that option. Payment terms of 90
days is too short for larger payments, as I am still early in my employment.

3. 1. Should mPokket introduce an EMI feature? What are the pros and cons vs. the
current offering?
Before answering should we build EMI feature. We have asked few more
question.
Do customer want it?
Is there data available to suggest customer want it. If no, we can build a quick
test in existing app to gather data.
Experiment:
Goal Assumption Strategy Hypothesis Test
Create an
EMI feature
Customers
are asking for
EMI payment
option.
(instead of
one time)
Because they
will spend the
money before
they reach the
final day for
payment.
EMI will bring
more bigger
spend from
customer,
which will
help
customer to
succeed in
life as well as
the company.
Customer are
looking for
EMI
repayment
option.
(30% of young
professional)
(20% of school
student)
Add one
banner in
“Get cash”
page to “EMI
option
available for
more than
30days”.
Submit for
Early access.
If Click Yes,
we will notify
you shortly
Customer are
looking to pay
monthly
instead of
after 90days.
(30% of young
professional)
Once user
select
Amount and
Tenure and
Don’t click
Request loan.
Popup
window “Are
you looking

4. (20% of school
student)
(**% can be
decided )
for more
days and EMI
payment
options?”
If Click Yes,
we will notify
you shortly
These tests provide customer desirability ratings of a product feature.
Assume: We have received huge data, that customer wants it.
Do we want to build it?
Is it align to with company’s Goal and purpose? As Mpokket strives to empower
youth, EMI helps them to empower young people by providing them with
opportunities to pay back their loans effectively. It is journey toward the vision.
Can we build it?
EMI option is already available and already being used by many companies. So
implementing it will not be a challenge or something new.
Can our customers use it?
As the name Mpokket is derived from "user friendly", we should design a
solution that can solve this challenge. Marketing and support staff can also help
us to reach our customers.
Pros
1. The monthly payments are known in advance and distributed evenly over the
loan's lifetime; the interest paid on an emi loan will not burn a hole in your
pocket.
2. Helps to identify defaults early, allowing for more time to take corrective
action.

5. 3. This option might attract more customers who are seeking it.
4. We can extend the limit of loan and tenure as EMI option are available for
our elite customer.
5. Extra opportunity to charge extra for missing EMI.
6. Increase in customer engagement.
Cons
1. Extra development cost.
2. Extra compliance as payment segregated across month.
3. In current tenure, it is only available for 60days and 90days option. No much
of option available.
4. Additional payment process fee as no of repayment will increase.
2. What specific parameters (ticket size, tenure, etc.) do you propose for the EMI
feature?
Do we have any data exist? Lets say No.
Create separate survey for both young professional and Student and tell
complete survey and get 10-20Mcoin.
Survey and Interview:
Are you looking EMI option?
How much of monthly income? (For Salary person)
For student how much they get from parents?
For which amount EMI will be beneficial for you?
Why?
Currently we have 30,60,90 days are there. If we add EMI, what are the tenure
you are looking for?
Ideal:
To minimize the risk of default, Mpokket keep the EMIs of the loan to about 45-
60% of your monthly income.
Create an MVP
1. Choose a customer segment.

6. a. Young professional looking for loan more than 10K and salary monthly
less than 10K. or Credit Score in Good region.
2. Limit only 1000 customer for first time.
3. Give them option for EMI only for 90days case. ( In case they choose 10K or
more)
Figure 1
4. Remind them every month. (Might be option to request money from bank
directly as ACH)
5. Consider all the difficulties, successes and lessons learned, and build on
them.
After
Before

7. 6. Repeat the same experiment with college and low salary professional with
reduced amount.
3. Provides examples of the user journey
If you're a college student, you can avail no income proof loans.
If you're a young professional, you will not get an instant personal loan without
income proof. You will have to provide your bank statement & other income
proof documents.
(EMI feature is already added in Figure 1.)

8. 4. The current backend systems and analytics are built around the current
bullet repayment structure. What changes do you think introducing an EMI
feature requires in the backend systems?
Repayment Journey
Current Pay in Full

9.  As EMI spread across multiple months, we need more notification to user.
EMI Payment

10.  Anyone missed, we need further effort from Customer support for follow-ups.
 Later might be an option to settle the EMI early offer.
5. What success metrics would you use to measure?
Lagging Metrics
Revenue/Profitability/ No of Repayment/No of Default/Loan Growth
Leading Metrics
DAU/MAU per month
No of customer taking EMI Vs Pay in Full per month
How many converted from Pay in Full to EMI
No of EMI paid Vs No of EMI due date per month
No of Extension EMI per month
Average Loan for EMI option per customer segment per month
Average Loan tenure for EMI option per customer segment per month
Customer Feedback and Rating