(IAP ’13) Hoda Eydgahi, G

Bluelight update: pilot test + departure

Well. Once again I don’t have Internet.  But this time, I’m sitting on a plane back to the States. Lufthansa apparently now offers wi-fi on their flights. But let’s be real; as a graduate student, I’m at the bottom of the academic ecosystem: the vulture.  The next time you attend a talk, look around and I’m sure you will notice a hungry grad student lurking in the shadows waiting for everyone else to finish their pickings before they swarm in for their share. Admittedly, I even belong to a listserv called vultures@mit, where they email out free food in Stata.  Disclaimer: chances are if you’re not on site within five minutes of the posting, the food is already gone.

In any case, onto project Bluelight! One by one, our team members are leaving Jordan; however, we have set up a few things to run in our absence over the next few months.

As I previously mentioned MOPIC will be conducting a survey of ~500-1000 people so that we can better understand our potential customers current savings and purchasing habits.  In addition, we have hired a country manager to oversee all operations in our absence. But most importantly of all… we have set up our pilot!  In addition to the survey, MOPIC will also be running focus groups to educate people about our product and to have them enroll into the pilot! The pilot will run for the next three to four months and subjects will have the option to save up for either 40 JD or 80 JD Safeway gift cards.  They will essentially purchase 5 JD Bluecards from loan officers and text in the six-digit code on the cards to the designated Bluelight number.  We also spent some time in the field meeting with potential costumers. Everyone seems excited about the notion, the only issue that we consistently came across was that of trust. Hopefully our partnership with Ahli Microfinance and Safeway will have addressed a bit of that. We are all super excited to have our first subject!


Check out that was placed in the Ahli local branch.  The boxes contain the printed BlueCards. Pretty professional, eh?

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Bluelight update: What’s yo name? What’s yo numba? Networking to the max in Jordan!

Well. It’s just another day at the apartment with no Internet! Ack! As an MIT grad student, Internet is like the oxygen that I breathe. Without it, it’s hard to function! I feel like the only other people who would understand this are fellow tied-to-my-laptop MITers. In any case, the past ten days have been incredibly informative. We have had a slough of back-to-back meetings on an almost daily basis—well, except for the unexpected snowstorm that completely shut the city down last week.  #ThirdWorldProblems, haha!  But the important part is to realize that as part of working with the developing world, things just don’t happen as efficiently as they do back home and it’s important to be able to adapt quickly else you will find yourselves frustrated very soon.  Plus, how often do you get to see palm trees covered in snow???

In any case, as I previously mentioned, Jordan is a great test bed country. It’s small and it’s incredible how within the more educated, influential sector everyone knows one another. This sect of the community tends to be very forward thinking and is incredibly welcoming of new ideas, which has worked in our favor in terms of arranging meetings.  In the past ten days, we have been fortunate to meet with representatives from the Ministry of Planning and International Cooperation (MOPIC), Zain Telecom, MicroFund for Women, Ahli Microfinance Company, Aramex, MENA Venture Investments, Safeway, Al-Raneen ads, National Microfinance Bank, Info2cell, Arabian Business Consultants for Development, TamweelCom, Tanmeyah Jordan Microfinance Network, Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ), Central Bank of Jordan, and Mindset, every single one of whom has been incredibly supportive and excited about the potential of the project! Many of them have also offered to partner up with us if the pilot goes well.  Safeway has granted us permission to run a survey involving about 120 people in their stores, which will be run by some student volunteers tomorrow; in addition, MOPIC is running a survey of 500-1000 people representative of potential clients around the country.  The purpose of the survey is to see if people would be interested in the product, and if so, for what purpose they would use it.

Through our meetings, we have come across a common theme: that the Arab people do not have a savings culture. Although we had heard this comment from other countries, it seems as though it is actually the case in the MENA region. The lack of a savings culture stems back to their lack of trust in institutions and the government in general.  For instance, they would much rather keep their money under their pillow where they can see it than in a bank.  It is very important to them that their savings are available in tangible form so that they can use it whenever they desire to do so.  After meeting with Zain, we learned that they had launched an E-Mal program (E as in Electronic, and Mal as in the Arabic word for money) that had a mere 2% adoption rate.  The system enables customers to perform money transactions using a mobile wallet. However, they learned that people would rather pay transportation costs and stand in three separate lines to pay each of their utilities than to use the system.  We are still unsure as to why the system was not adopted, but talking to Zain helped us realize that we need to change and further refine our marketing strategy.

We believe Bluelight will be different than the E-Mal system because customers will have a tangible goal towards which they will be saving money as opposed to saving for the sake of saving.  In addition, we have learned the importance of “word of mouth” marketing. We plan to deploy our pilot program with the help of Ahli Microfinance Company, which will send out loan officers to inform and recruit potential clients.  The loan officers will be people from a similar economic class as the people to whom they will be reaching out.  As a result, potential consumers will be more likely to trust them (the few people we spoke to mentioned that they are significantly more likely to adopt a program if someone they trust—i.e. a friend or family member—recommends it).  We are relying on those who decide to adopt Bluelight to spread the word within their community.  The pilot will be launched next week… here’s to hoping we have approached the marketing in an appropriate manner.


In the meantime, enjoy our newfound baller status:

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Marhaba from Bluelight in Jordan!

I have been very thankful to receive funding from the MIT IDI Technology Dissemination Fellowship.  With their support, I am able to report live from our livingroom here in Amman.

But first… introductions! My name is Hoda Eydgahi and I am a final year Ph.D. candidate in the Department of Electrical Engineering and Computer Science here at MIT; my specific focus is the technology development.  My other teammates are:

–John Ikeda (Harvard MPA/ID ’13),who is responsible for the overall management and is also an expert on consumer finance.

–Manoah Koletty (Harvard MPA/ID, MIT Sloan MBA ’13), who is responsible for the financial model.

–Blaize Wallace (MIT Sloan MBA ’13), who is responsible for the business development.

–Mustafa Hani Khalifeh (MIT Sloan MBA ’13), who is our Jordanian expert.


Now. John, Mustafa and I are currently on the ground in Amman. We are working on standing up a pilot program for our social enterprise, Bluelight.

The idea behind it?

Consumer credit is expensive in the developing world. Few people have the cash available for large purchases and formal savings accounts are often unavailable. Many try to save at home for large purchases, but this requires high levels of discipline to avoid temptation along the way. In many countries, poor households actually pay someone to hold their money to avoid this temptation.  Bluelight provides households in the developing world with alternatives to expensive credit.

Bluelight is an innovative new consumer finance concept that draws on traditional informal savings tools and cutting-edge behavioral economics research to generate opportunities at the Base of the Pyramid. Bluelight uses the power of microlayaway to help hundreds of millions of households across the developing world make small prepayments to buy consumer goods without going into debt.  Retailers such as Sears and Kmart have successfully used layaway payment systems for over 50 years. Last year, over 20% of Kmart’s holiday sales were purchased using layaway. In a layaway program, the retailer sets an item aside for a customer who then makes regular small prepayments towards the item. Bluelight adapts this model for the developing world, making the payments smaller and even more flexible.

We are planning to partner with large, trusted retailers in Jordan, such as Carrefour and Safeway, to manage their layaway programs for them. Bluelight independent agents, typically neighborhood corner store owners, market BlueCards to households and collect prepayments with a scratch card system similar to the system for prepaid mobile phone airtime. Prepayments are tracked using a sophisticated SMS-based database currently under development. Once a consumer completes all payments, she can take the completed BlueCard to any branch of the retail partner to exchange it for a gift card.

Why Jordan?

Since the concept is potentially Sharia-compliant, we decided that it would be of particular interest to Muslim nations. Jordan is a small country in the middle east where, as we have also learned this week, Zain, one of the biggest telecommunication companies in the region also run their pilot programs.  Jordan is a small, emerging middle-income country with reasonable infrastructure.  In addition, credit card penetration is relatively low (2-3%).  It also doesn’t hurt that our teammate Mustafa is from Amman and has an incredible network of people involved in everything from telecommnications to banking to microfinance institutions.

I return back to Boston on January 20th. Before I leave, the team hopes to meet with potential retailers, local merchants, microfinance institutions, banks, logistics companies, and other potential collaborators; further refine our business model, set up customer surveys (to see what the consumer seeks in such a program); establish focus groups (to inform small groups of 6-8 people about the program, hear their concerns, and enroll them into the program if they are interested); gain a better understanding of the economic ecosystem in Jordan, and to stand up a pilot program (a 3-4 month trial period during which consumers will partake in a small scale savings program).

This week we met with Al-Ahli microfinance bank, Zain telecom, Ministry of International Planning and Cooperation, Millenium Energy.  We’ve learned a lot already, but that will have to remain for the next post.  Unfortunately our plans for today and tomorrow have been completely destroyed as Amman has shut down due to a total snowpacalypse! We hope to be back on schedule with our meetings on Sunday (Friday and Saturdays are the “weekend” here). Until the next update, stay warm!

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