International Finance Corporation2015-04-022015-04-022015-03https://hdl.handle.net/10986/21683The poor and other underserved populations in developing countries have unique financial service s needs. However, there is often a mismatch between what financial institutions offer and what underserved populations need or want. This product gap may reflect a lack of interest by financial institutions in designing more target products, or a lack of willingness or capacity on the part of financial institutions to design, market and implement tailor-made financial products. The objectives of the Product Design Case Studies are to 1) develop expertise related to product design and innovation processes through a better understanding of best practices in the field, in depth research and application of behavioral economics concepts; 2) increase awareness of product design/innovation and the links between product development and financial inclusion; and 3) generate publicity and knowledge sharing around product design and innovation. While the hand loan product was broadly successful in achieving its original intent, the pilot encountered considerable institutional and execution challenges that are instructive for future product innovation efforts. The first two sections describe the problem and the innovative product designed to address it. The next section describes the final design and implementation of the product in detail. The fourth section covers post-pilot data collection and results. The final sections discuss lessons learned and planned future enhancements.en-USCC BY-NC-ND 3.0 IGOACCESS TO FINANCEACCESSIBLE LOANACCIDENTSACCOUNTINGADVISORY SERVICESAPPROVAL PROCESSBANK CUSTOMERBANKING SERVICESBANKSBASIC NEEDSBENEFICIARIESBORROWERBORROWINGBRANCHBRANCHESCASE OF DEFAULTCASH ADVANCESCASH FLOWCASH FLOWSCASH SHORTAGECASH SHORTAGESCOLLATERALCOLLATERAL REQUIREMENTCONSUMER CHOICECREDIT CARDCREDIT LINECREDIT OPTIONSCREDIT PRODUCTSCUSTOMER RELATIONSHIPDEBTDEBTSDEVELOPING COUNTRIESDISBURSEMENTDISBURSEMENTSEMERGENCY FINANCINGEMERGENCY FUNDSEMERGENCY LOANSEMPLOYEREMPLOYERSEXCHANGE RATESEXPENDITUREEXPENDITURESFINANCE SERVICESFINANCESFINANCIAL ACCESSFINANCIAL COMPANYFINANCIAL CONCERNSFINANCIAL COSTFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL MANAGEMENTFINANCIAL NEEDSFINANCIAL PRODUCTSFINANCIAL SERVICEFINANCIAL SERVICE PROVIDERFINANCIAL SERVICESFINANCIAL SHOCKSFINANCIAL STABILITYFINANCIAL VIABILITYFINANCING NEEDSFORMAL FINANCIAL SERVICEHIGH INTEREST RATESHOLDINGHOLDING COMPANYHOUSEHOLDSINCENTIVE STRUCTURESINCOMEINCOMESINFORMAL LENDERSINFORMAL LOANSINFORMATION SYSTEMINSTALLMENTSINSURANCEINTEREST PAYMENTINTEREST RATEINTEREST RATESJOINT LIABILITYLATE PAYMENTSLIFE INSURANCELIQUIDITYLOANLOAN AMOUNTLOAN AMOUNTSLOAN DATALOAN PRODUCTLOAN PRODUCTSLOAN RECOVERYLOAN REPAYMENTLOCAL MARKETLOCAL MONEYLENDERSLOW-INCOME FAMILIESMARKET VALUEMAXIMUM LOAN AMOUNTMFIMFISMICROFINANCEMICROFINANCE INSTITUTIONSMICROFINANCE PRACTITIONERSMOBILE PHONESMONEY LENDERSMONEY MANAGEMENTMONEY MARKETMONEYLENDERSMUTUAL FUNDNATURAL DISASTERSNEED FOR CREDITNEW PRODUCTNEW PRODUCTSOPERATING COSTOUTREACHPAWNBROKERPAWNBROKERSPENALTIESPENALTYPEOPLESPORTFOLIOPOTENTIAL BORROWERSPROFITABILITYPROMISSORY NOTEREMITTANCEREPAYMENTREPAYMENT BEHAVIORREPAYMENT CAPACITIESREPAYMENT RATEREPAYMENT RATESREPAYMENT RECORDSREPAYMENT SCHEDULESREPAYMENTSREPUTATIONSALARYSAVINGSSAVINGS ACCOUNTSEESSMALL INSTALMENTSSMALL-BUSINESSSMALL-BUSINESS LOANSSOURCES OF FINANCESTORETUITIONVILLAGEWOMANWorking PaperInternational Finance Corporation10.1596/21683