Project 1: Payment strategies for irregular incomes at the BoP

What insights can we derive from observing and understanding how those at the BoP currently manage their household budgets to inspire new transaction models or pricing strategies for businesses wishing to serve the poor more effectively, yet profitably?

The focus of our exploratory and user research in the field will be to understand the challenge of planning household expenses and budgeting when incomes are mostly irregular and unpredictable.

As things stand now, the challenge posed by current business models and payment plans is not the amount that must be paid but the inherent conflict between the regularity of the payments, usually on fixed schedules, against the unpredictability of funds available and irregularity of cash flow.

The short term goal of this project is to design a conceptual prototype of an innovative payment strategy or business model by which a community can share the cost of a shared resource or asset or enable access to information technology.

The target beneficiaries of the research would be any organizations seeking to serve BoP markets in a sustainable and profitable manner. The results are expected to be scalable and replicable for any BoP community and for different products and services. Furthermore, the results would also form a platform and offer frameworks for further and ongoing research.

Locations:

Since the funding is from the iBoP Asia project that focuses on science and technology innovations for the BoP in the ASEAN, locations were selected accordingly. The first location is a village in Iloilo district in the Philipines, about an hour outside Iloilo city, and contains about three internet cafes. The second location is in rural northwestern India, in the desert state of Rajasthan about 5 hours outside of New Delhi and 15 minutes by car from the district town center of Sawai Madhopur.

User profiles:

Since our intent is to understand the basics of household financial management by those at the base of the social and economic pyramid in rural areas we have selected our profiles accordingly. Approximately 6 to 8 individuals will be selected for indepth interviews, some ad hoc shadowing and plan extended observations over a few days of one selected household in each location.

For example, in the Philipines, I will be hosted by a woman who is head of the household and whose income is derived from a small convenience store run out of her home selling cold drinks and sundry goods like sweets and snacks.

Other identified profiles are based on selected combinations of education level and source of income – whether a regular job with fixed monthly income or irregular like the small trader or shopkeeper or odd jobs labourer, literate and illiterate as well.

Timing:

Philipines: The funding organization has requested an extended stay here as they have an NGO working with a community installing rainwater harvesting equipment and have asked for expert assistance. The user research will be about 10 days onsite (or until all interviews have been completed) followed by another week with the NGO at a different rural location. Not more than 3 weeks is estimated and the start date would be sometime in mid to late February.

India: Phase one observations and interviews will be conducted over ten days starting very late December ongoing until early January. 

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