Project Everest

[UVP] SoCon Fiji July 2019

Lean Phase: UVP 

Aim: 

This post highlights the value PEV can offer to small to medium enterprises (SMEs) and financial institutions (FIs). The value added is twofold. FIs are able to expand their customer segment because the loan application process, specifically financial documentation, is being simplified for their potential customers. Providing micro-businesses with a platform in which they can manage their finances better and improve their financial documentation will improve their chances of being successful in their loan applications, bringing more business to FI’s.  Through a partnership with both SMEs and FIs , PEV can go on to develop a solution that will convey the UVP. 

Big picture UVP: To create a solution for SMEs that allows them to approach FIs with required documentation so that SMEs can access financial resources to grow and diverse their business simultaneously with FIs expanding their customer segment. 

Small to Medium Enterprises: 

The value PEV is offering SMEs is offering to assist them in enabling them to access adequate financial management and potentially enable to expand & diversify their business.

For SMEs this looks like PEV providing a solution that simplifies and streamlines the financial management process. Through our interviews with SMEs in multiple coastal and inland villages, we’ve found that 55.8% want to expand their businesses but encounter problems from a lack of financial management. Since only 6.3% of SMEs we’ve interviewed found financial management as simple, by automating certain processes such as recording sales and stock purchase transactions targets we believe that most SMEs would see value in such a solution. 

In addition, 60.3% of SMEs kept documentation, but their method of documentation may not be uniform or be up to standard. As such, our solution would also streamline the format of documentation which would be valuable to both SMEs and FIs.

Financial Institutions: 

PEV is able to build a relationship with various FIs as we are offering a solution that allows them to expand their customer base as customers now have the ability to meet loan requirements. 

For financial institutions this looks like a potential partnership with PEV. Within this partnership PEV aims to provide value in the form of a solution which will improve the FIs ability to access customer segments that they are not currently reaching. The ability of customers to meet loan requirements before applying for a loan is of value to an FI as they are able to minimise time and effort to assist potential customers. With an increase in service efficiency, FIs will be able to reach customers that were struggling to meet requirements in the past. Value will be in the form of a product that will allow potential customers to satisfy the financial documentation requirements during the lending process: 

  • 4/11 FIs require some form of business plan or projection.  
  • 9/11 FIs require financial statements which include: Balance sheet, profit and loss statement and cash flows. 
  • 8/11 FIs require at least 3 months of bank statements 
  • 7/11 FIs require a Business Registration Certificate 

FI’s are unable to approve loan applications because potential customers are unable to provide certain elements of the financial documentation. This wastes the resources an FI inputs such as time and money. The lack of financial documentation has also reduced the portion of customers for FI’s, but because of strict policies, FI’s have no other option but to reject applications. FI’s see value in expanding their customer segment as this provides them with more business, and not only does it boost an FI’s competitive edge, more business also allows FI’s to reduce loan rates for customers. Reaching more customers of various demographics also helps FI’s establish important ties within their community, in particular with micro-businesses.

Next moves: 

Moving forward into the solution phase, it is evident that SMEs will find value in a simplified solution that improves their financial management. Our MVP is a simplified and automated income statement generator that is also required by FI’s to provide loans. A major problem SMEs experienced was their inability to track their items of credit, hence the added feature of being able to keep a record of their accounts receivables and accrued expenses is our proposed solution to this. It is also important to establish what type of solution a FI would see valuable and beneficial in expanding their customer segment. A solution must aim to improve their current issue which is customers not being able to provide the necessary financial documentation required to access a loan. We would continue to improve and develop the MVP following the feedback from our MVP testing to both SMEs and FIs. Afterwards, we may potentially be able to move on to currency testing. 

edited on 23rd July 2019, 23:07 by (Account removed)
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