Whether you’re launching a startup or expanding an existing business, you need to realize the vision of your future loan management system. Often, clients have an unclear assumption of what will and won’t work in the market. This disbelief might lead to the development of an unsuitable solution for an appropriate market or target audience resulting in a waste of resources. That’s why building an MVP software or minimal viable product for lending can prevent our clients from investing their money and time into possibly inefficient software.
So what is MVP in software people are talking about? What’re the purposes for creating it? And more importantly, what functionality to invest in at the MVP stage? In this article, we’re going to discuss the reason why MVP is a must product strategy and explore the features your vendor should develop first.
MVP is a prototype that includes the core features without any advanced tools. This prototype requires minimum resources but can be launched and already have sufficient competitive ability. When a lender needs to accelerate the launch of a software product in the market and get feedback from users, there’s no sense to spend months perfecting the new solution – a basic back-end functionality with a simple UX/UI interface is enough.
Minimum Viable Product – Yes, but How?
How to Choose SME Lending Software and Stay on BudgetThe key advantages of the MVP methodology are the speed of going to the market (up to 4 months) and a fixed development budget. For example, to develop an MVP of a future money lending software engineers spend 90 days. Once it’s done, you integrate the solution into your business process and analyze the performance. If the result is acceptable, you work on a new solution while the development team is expanding it with valuable integrations and refining the front-end and UX/UI.
What’s the Purpose of Creating an MVP?
Clients may perceive MVP as an unfinished product but they’re misguided. A minimum viable project is a finished solution that covers all key stages of lending and assists a business in overcoming several challenges. Let’s take a startup as an example. Statistically, 90% of them end up failing due to various reasons, such as:
38% are running out of budgets
20% aren’t withstanding the competition from developed companies
36% aren’t understanding their market needs and target audience
Loan Management System Overview: Essential Features, Modules & RequirementsBut creating an MVP solution at the beginning, startups can save money on investing in a basic yet suitable solution for their business (which is impossible if buying a box tool). Startups can better understand their customers and configure marketing tactics, thus increasing their chances to withstand the competition with successful companies. The same works with already thriving companies that decide to switch from their outdated system in favor of top-notch money lending software. The only difference is that an already established business faces much fewer risks than startups and already has a marketing history with customers.
Here’re more purposes to build an MVP for lending:
Testing UX and usability – good user experience can be efficient in streamlining teamwork resulting in increasing the number of processes applications and customer retention rate.
Getting feedback from users – checking if the product resonates with the target audience is great, but in the lending domain, an MVP stage also allows you to get feedback from your team to understand whether it’s usable or not.
Collecting information for the complete platform – from the very start, you know that the product’s multifunctional means to be, but MVP helps check functions that cast doubt and choose one of the solution variants.
Winning stakeholder’s buy-in and investors – when applying for funding, an MVP will prove to potential investors that your business is viable, sustainable, and executable. It can highly increase your chances of getting funding.
What Functionality to Invest in at the MVP Stage?
Think about the functionality your product should have and start with the most significant features to create the core. Don’t waste time on details, they’ll be later. Minimum viable product software development is about the basics needed to start lending.
CRM module
The customer relationship management module helps manage all your company’s interactions with customers, loan applications, loans, payments, and debts. It’s like a think tank of your MVP that contains all your business information and allows you to manage it from this center.
Product engine and calculation module
Creating a range of loan products is a great opportunity for business, however, in the beginning, it’s better to test an MVP on one product and then expand it. To have your borrowers under control, we recommend utilizing a module to trach payments and set up borrower payment schedules.
Data validation and credit scoring
The dedicated decision-making process protects the business, so it’s an integral part of every loan origination system. First, create a simple process to check and validate the entered data by customers, such as contact details, ID, photos, etc. Second, build a scoring solution able to process the data and help you predict non-performing applications.
Money transfer
Same as credit scoring, a money transfer is needed to let your business provide customers with money. You can send money to customers’ bank accounts, e-wallets, debit cards, and many more. However, according to your business need, we recommend starting with only several payment types and expanding the integrations later.
Statistics and reporting
To manage the success of your MVP, you need automated statistics and reporting modules. They’ll visualize the stats on your debtors, number of lost and signed leads, acquisition, data on non-performing loans, and more. Everything that can help you measure your company’s performance with an MVP.
This is only a small part of features that are worth implementing in the MVP stage of lending software development. In addition, you can check our project with Smart Finance where we successfully implemented the MVP stage.
In a nutshell, building an MVP software first is the best decision not only for startups but also SME lenders. It allows to validate ideation, minimize waste of money and time.
If you’re interested in MVP software, tell HES about your project and get a BA analysis with an estimate of time and the cost for the specified project. We’ve been on the market for almost 10 years and have 115+ successfully launched projects and solutions. HES FinTech will be glad to help you launch the MVP with the needed functionality. Get in touch with us to book a free demo tour and build an MVP for lending.
