Independent Venture
Increasing access to healthcare
The majority of people in India do not have healthcare insurance and have to pay out-of-pocket for healthcare expenses. In a country where the average household income has only recently reached $3,000 a year, affording expensive, often life-saving treatments becomes almost impossible. A lot of those who do try to afford these expensive therapies end up taking on so much debt that they fall into poverty. In fact unexpected medical expenses are the number one cause of poverty not just in India but worldwide.
Approach
After some ideation, we decided to launch a low-cost, micro-insurance firm. To do so, we partnered with an insurance firm, designed a consumer offer, and launched a pilot. To our surprise, we found that no one was interested. After conducting additional ethnographic research, we found that the customers didn’t want to buy something they may never need. They would rather use their limited funds to pay for things they value like a better education for their children or better housing. We realized that the job to be done we were targeting of “help me access healthcare without going into massive debt” could also be solved through a loan.
We partnered with a major banking institution and developed a loan product and then ran another pilot. To our surprise, we again found no takers. People were interested but they couldn’t qualify given the bank’s strict requirements. We went back to the drawing board and asked ourselves a question. HR professionals use behavioral tests to identify good job candidates. Could we use the same approach to identify good loan candidates. We developed a behavioral test and ran another pilot. As in the previous case, people did inquire about getting a loan but unlike the previous case, this time we approved the loan. We ran the pilot for over a year with amazing results.
Since then, we have refined and expanded the program not just nationwide but to other countries as well. Since launching about a decade ago, we have lent over $20M all while maintaining a default rate under 3%.