Ideate & IDEO Digitizing Small-Scale Retailers in Pakistan

Despite huge investments and several years of work by numerous organizations, Pakistan’s Fintech Ecosystem still faces both external and internal challenges in its journey towards enabling widespread financial inclusion. However, with a recent initiative by the Pakistan Fintech Association alongside newly placed government regulations, the push towards enabling a Fintech-friendly environment seems not far from fruition.

Recently, IDEO partnered with Ideate to work towards building financial and tech literacy amongst small-scale merchants in Pakistan. While most of the retailers rely on cash-only transactions, it potentially weighs heavily on their fast-paced day-to-day routine, potentially resulting in lost business. One of the project’s goals was to help retailers understand the benefits of adopting digital financial tools over cash-based payments, through a seamless stock credit experience. Another goal was for the product to have the ability to scale without heavy reliance on the supporting staff on the ground.

We conducted in-person research in Islamabad and Lahore with retailers to gauge their digital literacy, their views on the Islamic compliance of credit products, as well as their level of acceptance towards a digital product becoming part of their financial toolkit.

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We spoke to retailers and Business Development Officers (BDOs) to understand their needs and frustrations around credit today while learning more about their business goals. The information helped us understand how we could position our digital product in a way that was valuable to them. Our user research team spoke to retailers with varying levels of literacy and store sizes, as well as an expert on Islamic finance to better understand common concerns around such products.

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We found out that most of the users wanted to alleviate their own concerns about whether the product was Islamic compliant while being able to communicate this to others as well. We also found out that the store owners relied heavily on their family to help them make business decisions, especially when it came to taking loans. Since most of them were used to taking informal loans, strong relationships would have to be built with retailers today through in-person interactions, and gestures such as flexibility on loan repayments.

Through the data collected, the goal for what the final product should look like became apparent. The primary goal was to build a product that could also help raise financial and tech literacy amongst merchants in Pakistan, while making it easier for users to see the benefits of adopting digital over cash-based finance. This could be achieved by designing a seamless credit experience for retailers, and a service that they could trust and see as Islamic compliant, despite the varied views on the topic between them