Project CUE: Building A New Way to Credit

July 27, 2016

Project CUE (which stands for Connecting Underserved Entrepreneurs) is celebrating another major milestone. If you've been following our journey, you know that at the end of 2015, AEO won the CDFI Fund's Innovation Challenge , which called for submissions of proposals to help expand the capacity of financial institutions to provide credit, capital, and financial services to underserved populations and communities in the United States. We proposed to build a scalable software platform that matches small business owners declined for loans with community lenders who may be able to help them. After months of research and discovery, using design thinking  and scenario planning principles, we built the system using Amazon's Web Services  to ensure that scalability, affordability and security are part of the core infrastructure. We are happy to share that we have recently started testing our platform with users!

In our fourth and fifth blog posts about Project CUE, we introduced you to the two archetypes that we are using to focus the design and development of our platform. Rochelle Jones represents a typical small business owner and an ideal client for a community lender. She's a 45-year-old owner of a daycare facility in St. Louis and is ready to expand her business. Kathy Davis, 42, is a loan officer at a community lender, and she loves her job because she helps small business owners fulfill their dreams. Rochelle and Kathy have "highs" and "lows" when it comes to their feelings about the loan application process. In this blog post, we'll show how the insights we derived from their respective experiences influenced the functionality and overall design of the site. We hope you're excited for this preview!

Experience from the business owner's perspective

Images courtesy of #WOCinTech

In our research, we learned that small business owners like Rochelle feel frustrated after they are declined for a loan by a bank, especially after so much back and forth with loan officers. In Rochelle's case, she provided profit and loss statements showing that her business has been growing steadily over the last 5 years, but the bank declined her loan application because her business wasn't the right fit for their loan portfolio.

Like Rochelle, business owners that we interviewed told us they felt both disappointed and disheartened at this stage. They see the bank's rejection as a sign that their business may not be valuable. This, of course, is not true -- her borrower profile just happens to not be the right match with that particular mainstream bank lender. It certainly doesn't mean that there aren't other lenders out there willing to consider her application. That's where CUE comes in -- the system works with both the lender that just declined the applicationand a network of community lenders that have products and services that might be a better fit for the applicant. So when Rochelle receives an email from her bank directing her to CUE, it's an opportunity to transport her away from the perceived dead-end of a "decline" for a loan by her bank to the wide open road towards "delight," securing a loan from one of many potential community lenders more aligned with her business needs.  

Because of this research, the team has gone to great lengths to make sure Rochelle's interaction with our website and with our CDFI partners is as smooth and as trustworthy as possible. For example, the language on our landing page below is intentionally meant to comfort Rochelle who has just been declined for a much-needed loan by her local bank. For the design of our landing page, we deliberately chose images and messaging that convey trust (and will continue to test images in the future). A survey we conducted found that small business owners overwhelmingly stated this landing page felt "trustworthy." What do you think?

The next few screens Rochelle encounters (below) are designed to educate her about how her personal credit score and other business-related information can affect her ability to gain credit from a lender. These educational screens should help further establish the credibility of the CUE service but more importantly should also provide valuable insights to applicants like Rochelle.

Once Rochelle reviews her personalized assessment, she's then encouraged to register with the CUE system and provide more information about herself, her company and business story. The additional information requested is what helps our network of community lenders to conduct a deeper evaluation of her business, and potentially increases her potential to secure a loan for her business.

By the time Rochelle reaches the end of the application, we hope that she's now feeling hopeful and is thinking that someone is working to help her achieve her business goals.

Experience from the lender's perspective

Images courtesy of #WOCinTech

Based on our learnings from the community lenders we've partnered with on the project, we know that Kathy Davis, our archetype loan officer, loves helping small business owners like Rochelle and wants to give each client as much time as possible. It also means she often can feel overwhelmed with the "high-touch" nature of her work. Our extensive interactions with representatives from leading community lenders also taught us that the eventual adoption of our tool would depend on its ability to produce reports and integrate with the reporting and tracking tools that they already use, so that Kathy and her colleagues can take on an increasing amount of new business without any adverse effects to overall productivity.

The Project CUE lender portal was designed to make it easy for loan officers like Kathy to manage their organization's account profile, generate reports, manage accounts, access applicant information, and monitor loan activity. The portal provides a variety of options for creating different types of time-based campaigns focusing on specific criteria for referrals they'd like to receive during particular time periods. Many CDFIs operate within certain geographic boundaries like zip codes - and that's just one of many options for filtering potential applicants. The portal can also filter applicants by CDFI Eligibility, Census Tract Number, or Outstanding Debt fields, for example, among other options.

Lenders like Kathy have told us that it was important to them that our tool have a variety of reports, as well as the ability to export files into the suite of other programs they use. Here's a snapshot of what a report looks like.

While we're delighted with our progress to date, our work is far from finished. The platform will continue to evolve and improve based on the feedback we receive from our users - community lenders, small business owners, and referral partners. We can't wait to give you another update on our progress. Stay tuned!

What do you think of what we've shared thus far? Let us know in the comments or reach out to us on Twitter.

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What is Project CUE? In 2015, the U.S. Department of the Treasury's inaugural CDFI Innovation Challenge called for submissions of proposals to help expand the capacity of financial institutions to provide credit, capital, and financial services to underserved populations and communities in the United States. AEO's winning bid proposed building a platform to move loan applicants "from decline to delight" to appear at the critical point in the lending process when an institutional lender declines an applicant and pivot that moment into an opportunity to introduce CDFIs as potential lenders.

Do you have an idea for an innovation to help expand CDFI investments and increase access to capital in underserved rural areas, particularly those that are characterized by persistent poverty? The CDFI Fund recently announced their FY 2016 CDFI Fund Prize Competition which will "reward selected applicants with monetary prizes, totaling up to $1,000,000, for innovative proposals that (1) identify and promote new ideas and practices, thereby facilitating their implementation by CDFIs that serve rural areas, and/or (2) create value during and after the competition by encouraging CDFIs that serve rural areas to develop new skills or practices that may have beneficial effects on the rural areas they serve."

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