Our Applab Money initative focuses on researching, prototyping and testing innovative financial products to reach poor people who don’t typically have access to these resources. Project Manager Olga Morawczynski and Operations and Strategy Manager Lisa Kienzle recently wrote on the CGAP blog about the need to develop creative products that focus on existing customer desires, use patterns, and needs. One example: using the idea of gaming and gambling to create a helpful product for poor people.
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.
Imagine, they said, what would happen if Arthur had access to a formal financial product that provided a safeguard against emergencies, but the sensation of a game.
Read the full post on the CGAP blog.