How to increase loan applications & conversion rate

Getting a personal loan process

View TL;DR

Quick summary of this project

Navi is an 🇮🇳Indian fintech super-app with Cash loans, Investments, UPI Payments, Insurance and many more. As of 2024, it has $100 million in revenue with $10 million in profit.

Navi is an Indian fintech Super-app with Cash Loan, Investments, UPI Payments, Insurance and many more. As of 2024 it has $100 million in revenue with $10 million in profit.

Navi is an 🇮🇳Indian fintech super-app with Cash loans, Investments, UPI Payments, Insurance and many more. As of 2024, it has $100 million in revenue with $10 million in profit.

Project overview

What

This project highlights how design helped to offer an intuitive loan application experience and increase the top of the funnel and overall loan disbursal rate.

Overall business impact

+33%

No. of application

-21%

Drop-off rate

+10%

Loan disbursal

My role

Sole product design, Strategy, and User testing.

Collaboration with

Product managers, Software developers, UX researcher

problem statement

What can be improved?

Only a 30% conversion rate on the same day of initiation. The reason varies in process to process and it is being discussed in the respective flows below. However some of the generic problems are...

Understandability issues

Trust issues

Practicality issues

If 100 people have started the loan application process today(assuming these people got an offer and Navi will eventually disburse the loan), only 30% are able complete the entire process by today itself. All the rest will disburse the loan within 60 days.

Who should care?

Our primary customer base has the same needs as this persona

Reside in India 2 & 3 cities

Earns 25k - 35k/mo

Hello! I am Mukesh

I am 28 years old, a cook at a restaurant.

I live in Bhagalpur district and I earn around ₹25k per month.

Why personal loan?

I need to renovate my house and need ₹1 Lakh. I will check

Hassle-free process
Digital & instant disbursal
Trustable company
Lower interest rate

I need to renovate my house and need ₹1 Lakh. I will check

Hassle-free process

Digital & instant disbursal

Trustable company

Lower interest rate

I need to renovate my house and need ₹1 Lakh. I will check

Hassle-free process
Digital & instant disbursal
Trustable company
Lower interest rate

OUR RESEARCH METHODS

How did we discover problems?

Quantitative data

Deep learning of current metrics

Screen recordings

Watch how users interact and validate hypothesis

Listen to customer support

Product designers sit with the customer support team

Customer call - telephonic

Product designers and managers directly call users

What do we want to achieve?

1

Increase impression/day for the loans page

2

Increase loan application rate

4

Repeat loan applications

3

Application conversion rate

The vision

The vision was to learn from quick experimentation and rapid testing with users to offer the best seamless digital loan process experience to them.

Rapid testing

Quick optimising

TESTING METHODS

How do we validate the solution?

We go out of office premises and approach shopkeepers and auto-drivers to conduct a task based research to understand how they are consuming the solution. Although only 50% people offer to help, we get very interesting insights and observation.

India 2 & 3 relevance

Ground level data

Loan application process

Basic details

Work details

Loan offer

Bank verification

User verification (KYC)

Loan disbursal

1/4

How to increase impressions per day

We introduced an entirely new real estate to pitch Loans. Core job of this loans tab is to give insights of loans and convince user to choose Navi.

Old placement- Product grid

New entry point

New loans tab

What if users get to see a loan page instead of starting the process of loan application directly? The core JTBD of this page is to inform the user about:

Loan application details

Unique offerings

Social proof

Why Navi?

The core USPs - Zero processing fee, foreclosure charges (rarely competitors provide) and instant disbursal (mostly competitors provide)

Effortlessness

Since Mukesh is not very well versed in English, the thumb rule is to convey things most simply.

Social proof

Trust building and social proofing a very important factors as personal loan products lack word-of-mouth

Secondary product

Home Loan diversify the lending business and should be considered as a secondary product in this tab.

Masthead states

Application progress

2/4

How to approve more application

loan offer funnel optimisation

Loans tab

Basic & work details

Loan offer

The problem statement

90% of our application gets rejected because of weak credit score, despite having good financial habits. Collecting and analysing their bank statements will help us optimise the decision making process.

Only 10% application gets loan offer

Existing flow

Work details

Loan offer

Application rejected

Low CIBIL

The new flow

Work details

Loan offer

Bank statement

Application rejected

Partially rejected

How do we fetch the bank statement

Intregation of third party account aggregator helped us to fetched users’ bank statement with ease

What

27 banks

How

Only OTP required

What

250 banks

How

PDF upload

Challenges in user experience

To reach more audience we onboarded 2 account aggregators (They create a bridge to get bank statement and sells SDK to others) and one required OTP and another PDF upload to get this data. PDF upload is such a tideos process and user might drop off

PDF upload is tideous

User might drop off

How to reach more audience in an effective way

To minimise the drop-off, we created the flow in three layers. Since entering OTP is more convenient we kept those sets of banks in the first layer.

1st list of banks

Only OTP required

2nd list of banks

PDF upload

3rd list of banks

Application reject (but collect data - bank name)

1st Funnel - powered by Finvu

Low CIBIL

OTP required

2nd Funnel - powered by Finbox

Low CIBIL

Can’t find your bank in the first page

Bank statement PDF upload

3rd Funnel - Shown all Indian banks

excluding Finvu & Finbox

Low CIBIL

Can’t find your bank even in the second page

Loan rejection

But why can’t all the banks be on the same screen?

Schedule a meeting and let me answer all your questions

3/4

How to reduce the drop off rate on bank verification process

Optimising bank verification

The Problem

Users have to manually type out all the bank details followed by penny drop process. Existing drop off rate was 45%.

Introducing bank verification using UPI

Pay ₹1(refundable) via UPI and we get all the bank details to verify your bank

Previously users had to type all the bank details

(New) Via UPI - Just make a UPI payment

Target metrics - drop off decrease from 45% to 37%

Existing

NEW (failed)

Experiment - Failed (drop off rate was still 43%)

The expected decrease in drop off rate was not fulfilled

User research

Open ended telephonic call to actual users

Who - Users who landed on the new bank verification screen in the same day of loan initiation/loan application start. These users never went ahead with the flow.

Size - Called 25+ people, out of which 6 were seemed to be interested in providing feedback

The insights

As this is a new process and users have to pay money instead of receiving money, people misunderstand it with some kind of fraud.

Success rate of verification is lower than “using account number” process (existing)

Experimentation

Control

TEST 1

✅ Highest initiation

TEST 2

✅ Highest success rate

TEST 3

Solving for trust

Distrust comes from non-familiar things. Here users’ concern would be, “I am here to receive money why should I send ₹1?”.

How we addressed this issue?