How can Nu Holdings address the recent decline in average transaction volume on its personal loan platform in Mexico?

Introduction

The recent decline in average transaction volume on Nu Holdings' personal loan platform in Mexico presents a complex challenge that requires a systematic approach to identify and address the root cause. As we delve into this issue, we'll employ a structured framework to analyze the problem, generate hypotheses, and develop actionable solutions.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a seasonal component. Has this decline coincided with any particular time of year or event?

Why it matters: Seasonal patterns could explain temporary fluctuations. Expected answer: No clear seasonal pattern identified. Impact on approach: If seasonal, we'd focus on year-over-year comparisons.

• Considering user segments, I'm wondering if this decline is uniform across all borrower profiles. Have you noticed any particular user segments more affected than others?

Why it matters: Identifies whether the issue is systemic or segment-specific. Expected answer: Decline more pronounced in younger borrowers. Impact on approach: Would tailor solutions to specific user segments if applicable.

• Thinking about recent changes, has there been any significant product update or policy change in the last 3-6 months that might have impacted user behavior?

Why it matters: Recent changes could directly correlate with the decline. Expected answer: A new credit scoring model was implemented 4 months ago. Impact on approach: Would investigate the impact of this specific change on loan approvals and user experience.

• Considering market dynamics, has there been any notable shift in competitor offerings or marketing strategies recently?

Why it matters: External market forces could be drawing users away. Expected answer: A major competitor launched an aggressive marketing campaign. Impact on approach: Would analyze our competitive positioning and value proposition.