Meeting our customers’ needs
We make all of our charges clear at the outset. There are no hidden surprises. The fact that we do not charge default penalties on the majority of our loans also means we can help customers through difficult times.
Customers who say our loan agreements are easy to understand
86%
Customers who say they are satisfied with our service
68%
Our target for delivery of a loan in cash, from first contact with customer
48hrs
Our products are carefully designed with our customers’ needs in mind and we carry out market research and conduct focus groups to ensure these requirements are continually met.
The home credit service has proven to be highly popular with our customers. In the 11 years since we first began operating we have provided credit to more than 5 million people. The home credit service is popular because it is quick, convenient and provides a manageable way for our customers to spread their family budgets to buy the things they want. The relatively small, short-term loans we provide enable customers to budget for repayments. Most customers also have the added assurance that they will not face extra charges if they have difficulty making payments on time.
With busy home and work lives, our customers like the fact that we can usually provide a loan in cash within 48 hours from initial contact. This can be much quicker than mainstream lenders who in these emerging markets do not have the usual sources of information on which to make credit decisions, such as well established credit bureaux or bank account data.
Customers also like the convenience of being able to arrange loans and make repayments in their own home, at a time that suits them. The agent calls at the same time every week and saves them having to travel to a bank to make payments.
We make every effort to keep our customer documentation clear and simple. Our customer information sheets and agreements set out the necessary information in plain, appropriate language. Our commitment to providing clear, straightforward information is closely linked to our approach to financial literacy which is the main focus of our community investment work. In recent externally commissioned research it was found that 86% of customers feel our loan agreements are easy to understand.
Pricing
For a typical one-year loan, a customer would be expected to pay around 170 for a loan of 100. This includes the interest cost of the loan as well as the cost of an agent visiting the customer every week and, importantly, the guarantee that there will be no additional penalty charges. We believe that home credit offers good value to our customers compared with other credit products when you take into account the home service provided by the agent, the speed at which a loan is typically delivered, and the peace of mind most customers have that they can miss weekly repayments, when they are short of cash, without penalty.
We make all of our charges clear at the outset. There are no hidden surprises. The fact that we do not charge default penalties on the majority of our loans also means we can help customers through difficult times. They know from the outset that our charges are fixed and will not increase even if they miss a payment or are late repaying their loan.
Above all, the service we provide is professional, friendly and personal. Our research also found that 68% of customers are satisfied with our service.
New flexible products
As a part of our drive to deliver improved customer focus we have decided to roll-out what we call our flexible products. This is an evolution of our traditional product which provides our customers with additional choice and greater transparency by breaking down the price structure into individual elements (for example interest, administration and collection fees) and offering the choice of using our unique home service for repayments or using the traditional banking system. We have already successfully introduced this into Poland and Slovakia and following pilots in all our other markets we have decided to roll it out across all of them in 2009. This new product will replace the existing offering.
Our experiences in Poland and Slovakia clearly demonstrate that the majority of customers prefer the agent to collect their weekly instalments. We believe, however, that the new product offer will be appreciated by our customers and will greatly help others better understand home credit and the constructive role it plays in many people’s lives.