The document summarizes research conducted in Tanzania to design a new digital microcredit product for rural farmers. Key findings include: 1) Farmers experience a "dip" in excitement during the difficult signup and loan application process, becoming frustrated and confused. 2) Personas were identified along axes of willingness and ability to change behaviors. The "Emerging Striver" represents a promising target segment. 3) Features of the new product design address pain points through flexible credit terms, integrated savings, expert support from wakalas, and improved marketing and USSD application. 4) Changes like increased starting loan sizes, tiered repayment periods, and specialized wakala services aim to improve the

1. RAF and FRP Partner
Learning Workshop
Rural and Agricultural Finance Learning Lab
October 19, 2016
Kigali, Rwanda

2. PLENARY SESSION 2
Initiative for Smallholder Finance/Dalberg
DIG field work: HCD to create a new digital
financial services product template in
Tanzania

3. A human-centered design approach
October 2016
Customizing Rural Digital
Credit Products:
PLAYBOOK
Partnering on an HCD approach to adapting mobile
microcredit for a rural market

4. Halotel, a new MNO entrant, is winning rural customers at
unprecedented rates. Despite not offering digital credit,
they boast guaranteed 2G/3G network coverage in areas
where the big three have intermittent coverage. Many
customers are switching over to Halotel for this reason.
The big-three MNOs are suffering an increasing negative
perception in rural areas where reception is intermittent.
Customers complain that their bundles expire even when
network outages prevent them from using the call minutes..
_________________________________________________
“My network keeps stealing from me. The other day, I
couldn’t use my bundle because the network was out the
whole day. When it expired the next morning, I called
customer care for a refund, but they were helpless.”
- Mr Joseph, Matendo village
Microcredit trends in Tanzania Other market considerations
There have been a handful of microfinance
institutions and microfinance banks that offer
micro credit to consumers. Vodacom, and later
Airtel, pioneered digital micro-credit in Tanzania
with their M-Pawa and Timiza products
respectively
Tigo has recently launched Nivushe, their
unsecured loan product. Having learned from M-
Pawa and Timiza, Nivushe incorporates some
improvements over its mature counterparts. Now,
the big-three MNOs are competing head to head
in the digital microloan space.
The competition mix is diversifying with major
commercial banks entering the microfinance
space. CRDB recently launched their microfinance
bank aiming at reaching rural consumers. This,
coupled with their micro-insurance product, Fahari
Huduma and SimBanking services, makes their
package attractive to rural dwellers.
There are also new startup entrants into the
microloan space. Once such player is Branch, an
app that uses Facebook and call/ SMS history,
among other indicators, to offer unsecured loans
starting at 20,000 Tsh. Like Branch, other digital
credit products that were successful in Kenya
could move into Tanzania.
Traditional digital credit providers New MNO entrant
Banks moving to microcredit Startups in digital credit
In Tanzania, there have been recent moves to expand
penetration of mobile microcredit

5. 46 farmers
9 wakalas / agents
22 villages
24 users / 21 non-users
The DIG team conducted local market research to
inform a parallel design process

6. Market context
Personas, journey map, opportunities

7. The emerging striver
• Access to credit - young and unmarried, he is
excluded from formal and informal financial
mechanisms and community engagements
• Loan to purchase boda-boda, his own farm plot
or as seed for a business
• Way to save up to meet goals. Banks are
inconvenient while mobile money is too liquid.
• Lacks support from MNOs to help him
troubleshoot client issues.
Willing
Able
“It is very difficult for me to get a loan. My peers don’t have money to lend me and everyone
else thinks I am too risky or says I don’t have a house or land (as collateral)”
• Aspires to save enough to buy a plot, start a family
and build a house
• Wants to start a business as a boda-boda owner
and driver
Dreams and aspirations
Needs
Kennedy is a 22 year old living with parents in Buchose, Mwanza.
COMFORT WITH
TECHNOLOGY
low high
PROXIMITY TO
URBAN/WAKALA
home wakala
• Uses mobile money to save, send
and receive money
• Saves 50k in mobile wallet
• Uses both M-Pawa and Timiza for
emergency needs e.g. travel or
airtime
Financial portfolio
• Farms staples on a family plot
• Labors part time on others’ farms for
cash
• Is a multi-MNO freelancer; he
registers new SIM cards and is the
face of MNOs
Activities
Example: The Emerging Striver as a target segment

8. Ability to change behaviors
Adopting and using digital credit is
fundamentally about changing behavior. A
behavior change framework helps us
understand the different influences on driving
behavioral change.
• Level of education
• Technical knowhow and comfort with
technology
• Proximity to wakalas
• Level of income
• Exposure to / familiarity with credit
Willingness to change behaviors
• Need for credit
• Access to alternative sources of credit
• Motivation and determination
• Nature of dreams and aspirations
Understanding digital credit users in Tanzania
5 distinct smallholder farmer personas with unique behaviors and needs
High motivation
to change
Low motivation
to change
Low
ability
to change
High
ability
to change
Enterprising
Hustler
Diversified
Achiever
Emerging
Striver
Burdened
Breadwinner
Community
Activator
We mapped farmer personas along an
ability/willingness spectrum

9. Farmer hears about product from
radio and SMS ads and peers, and
he is excited by prospect of being
able to take loans and save. He
sees the potential for utilizing the
loan for emergency situations, or
to save up for a specific goal or a
rainy day.
Farmer goes to either his peers or
a wakala to inquire about the
product and ask about how to sign
up. The farmer may even be signed
up by the peer or wakala.
Regardless of signup method, the
farmer finds the process to be very
difficult and starts to feel
frustrated and confused.
Farmer takes out first loan, either
on his own or with the help of a
wakala/peer. He goes to a wakala
to cash out the first loan and
sometimes for support with the
loan process or with beginning to
save. The farmer finds the process
to be just as confusing as signing
up, and the farmer’s frustration
deepens. It only begins to be
alleviated once the farmer receives
the loan money or is able to begin
saving.
Farmer continues to take / repay
loans, save, and increase credit
limit. As he becomes more familiar
with the process and earns interest
/ raises credit limit, he begins to
feel happier about using the
service.
TOUCH POINTS
LEVEL OF EXCITEMENT TOWARDS SERVICE
The research indicated a “dip” in excitement at critical
early stages of the consumer journey

10. A New Service for Farmers
Examples of Key features, value and impact, customer experience

11. New Service for Farmers
01
Flexible
Credit
02
Integrated
Savings
03
Expert
Wakalas
04
End-to-end
Marketing
05
Responsive USSD
Application
• Increased starting
loan size
• Tiered repayment
periods
• Incentives to repay
regularly
• Locked savings
option
• Tangible benefits
• Clear savings to
credit pathway
• Extensive collateral
support
• Specialized wakala
services
• Shared incentives for
wakalas
• Simple, direct
communication
• Clear calls to action
• Contextualized
imagery
• Aspirational
messaging
• Required terms and
conditions
• USSD to SMS triggers
• Confirmation of actions
• Instructional menus
• Urgent notifications
• Integrated reporting
Specific objectives at each stage of the experience
guided feature changes in 5 intervention areas

12. Farmer qualifies for 10,000 Tsh test loan
with a two week repayment period
Increased starting loan size
With New Service for Farmers, users will quickly qualify for a
larger starting loan of 20,000 Tsh compared to the current
2,000 Tsh to 5,000 Tsh. However, both to protect Vodacom
and to support farmers’ need to understand how the service
works before borrowing, farmers will be required to take and
repay two 10,000 Tsh “test loans” that allow them to
experience how they can raise their credit limits after
every full repayment.
How it Works:
Farmer qualifies for ”real” starting loan of
20,000 Tsh only after fully repaying current
loan
SMS notification clearly explains that the
farmer will raise credit limit once they fully
repay two 10,000 Tsh loans
Farmers borrows second 10,000 Tsh loan
“The closest wakala from here is 5km away. A roundtrip bus
ticket to get there costs 2000 Tsh. Then I am charged
withdrawal fees. It’s more costly for me at the end of the day
as I still need to repay the loan.” — Mzee Rajaab, Tubila
Flexible Credit: Increasing the loan size

13. 10,000 Tsh test loans with a 2-week
repayment period
Tiered repayment periods
New Service for Farmers will allow realistic repayment
periods that align to farmers’ income cycles. A smaller loan
amount can be repaid within a shorter repayment period;
however, as loan sizes become larger, they will require
longer repayment periods with varying interest rates. This
tiered repayment structure will ensure that farmers choose
achievable time frames for repayment, thereby
discourage defaulting on loans.
How it Works:
“One month is truly not fitting to have a farmer pay back a
loan. You need to understand that we get out income from
our farming. It’s very irregular and only comes during the
harvest season. So asking me to repay back any type of loan
without considering the harvest period, is really setting me
and other farmers up for failure.” - Hamisi, Tubila
100,000 Tsh and above loan with 3
months and above repayment period
20,000 Tsh real starting loan size with
a 1 month repayment period
50,000 Tsh loan with a 2 month
repayment period
Flexible Credit: Tiered repayment periods

14. Specialized wakala services
Research clearly indicated that farmers can easily identify high-
performing wakalas, who are able to teach themselves on new
products, make themselves available to support customers, and
possess an extensive knowledge of the technology and program at
hand. However, even these wakalas, when questioned, express their
struggle to support their customers. Most wakalas feel unsupported
and their efforts unnoticed. Extending specialized support to the
wakalas will enable them serve their customers better and eventually
grow their customer base.
“I try to go above and beyond in making sure my customers are
supported in all their needs. It’s the only way to ensure they come back
to me. However, there are some issues that are beyond my clearance
and I have to refer them to the HQ in Morogoro. I wish I had the ability
to help them on all issues.” – Selemani, Magole village
Expert Wakalas: Specialized Wakala Services
Specialized technical and business
training for high performing wakalas
How it Works:
A dedicated and well-staffed phone
resource line where wakalas can call
to ask about specific topics
Training guides to support wakalas in
explaining to customers how to use
digital credit

15. Shared incentives for wakalas
Currently, wakalas are not offered any kind of financial
incentive to upsell products and services to their customers.
To boost adoption and encourage onboarding of potential
new customers who have heard of M-Pawa, wakalas could
be offered financial incentives – such as commissions –
based on the number of new customers that they onboard
onto the service. However, some additional customizations
will be required around how to measure the number of
customers a wakala brings on – such as by having a wakala
send the customer’s phone number to register that
transaction.
How it works:
“When a customer asks me about a phone feature or service,
I do my best to explain it to them. However, I wouldn’t do it
to every customer because it takes too much time” – Wakala,
Matendo village
Expert Wakalas: Shared Incentives
Wakalas promote service widely to
their customers, and identify those
customers who are eligible to sign up
Wakala receives commission or other
financial incentive for that
onboarding transaction
Wakalas encourage eligible customers
to sign up for service, and support
them with onboarding process
After onboarding, wakala sends the
user’s # to carrier as a confirmation of
supported transaction

16. Expert wakala: Value and Impact
HIGH
As the Emerging Striver is not located close to an urban center,
he will be able to better rely on his local wakala for support and
assistance, and perhaps become an ambassador himself.
HIGH
As someone who is not very comfortable with technology, the
Burdened Breadwinner will benefit greatly from knowledgeable
wakalas and ambassadors.
HIGH
With access to higher starting loan sizes, the Community
Activator will be able to borrow to purchase the inputs he
needs, and be able to justify the cost of traveling to a wakala
MEDIUM
Even though the Enterprising Hustler is already located near/in
an urban center and is highly technically literate, he would still
benefit from better wakala support. He may be eligible to be an
ambassador himself.
LOW
Since the diversified achiever is so comfortable with technology
and banking products, he would likely not benefit much from
expert wakalas. However, he could sign up as an ambassador
for nearby areas.
Supporting wakalas with the right
resources and training will strengthen
their ability to support customers both
technically and with financial issues.
More visible wakalas will be able to
increase their customer base and in
turn, onboard additional customers to
M-Pawa for Farmers.
Providing financial incentives for
wakalas who are able to successfully
onboard new customers to M-Pawa for
Farmers will also lead to bolstered
awareness and adoption rates.
It is important to map the value and impact of these
changes for the consumer segments

17. TOUCH POINTS
LEVEL OF EXCITEMENT TOWARDS SERVICE
Farmer sees a poster for M-
Pawa for Farmers that depicts
a successful farmer with new
equipment. He has heard
about M-Pawa from his
friends, too, and so goes to his
local wakala to ask for more
information.
The wakala uses training
materials to tell the farmer
about how he can use M-Pawa
for Farmers to save up for
future financial goals and build
credit to borrow money to
increase his crop yields. Farmer
likes the idea, so he signs up on
his own through the USSD
application and goes through
the terms and conditions as
part of signup.
Farmer begins saving in M-
Pawa, as per the app and SMS
instructions he saw and also
what his wakala told him. He
also takes his first 10,000 Tsh
loan and receives to money,
which he is able to use for
school supplies for his children.
He repays the loan on time,
and finds himself very happy
with the way the product
works.
Farmer continues to take /
repay loans and increase
credit limit. As he becomes
more familiar with the process
and raises credit limit, he feels
even happier that the product
works just the way it was
advertised, and sees that it
really is helping him achieve
his dreams.
In the updated experience map, the “dip” in excitement
is removed from the customer journey

18. Thank you!