“With virtually everyone in the Philippines having a social media account, regardless of social status or economic standing, it is easy to see why these are great tools for mining data. And for a country that has yet to adopt a universal ID system, the basic information provided by Filipino users on these sites become extremely helpful in verifying identities, which in turn helps us to approve more loans for more people, and at faster speeds while managing risk. This, along with our use of other data sources such as from credit bureaus helps us to approve even unbanked or first-time borrowers while mitigating risk. All of these data sources are crucial because the more data we have, the better the chances of approving credit worthy individuals. At the same time, we are happy to be able to promote financial inclusion by helping the government build a comprehensive credit database, while being a responsible lender at the same time.” ~Leos Gregor, Head of Risk at Home Credit Philippines
Home Credit: gathering, matching consumers’ information on social media crucial to risk management for financing first-time borrowers
With Filipinos reported to be spending more time on social media than any other country in the world, the ability of platforms such as Facebook, Viber and Instagram to connect people and build communities is more potent than ever.
Fast loan approval
Gregor explained that Home Credit currently has one of the fastest, if not the fastest, loan processing and approval times in both the local and international finance industry, requiring only two valid IDs from the applicant. In the Philippines, where majority of applicants are approved within less than 5 minutes, Home Credit’s automated system can quickly receive a loan application form and determine if the application is approved or declined.
A portion of this time is spent doing data check on customers’ social media accounts, wherein Home Credit’s underwriting system will match information provided in the applicant’s loan application with their social media information.
Supporting financial inclusion in PH
Gregor noted that especially for first-time borrowers with no existing credit records, having social media accounts that contain accurate identification and as much relevant information as possible can increase their chances of loan approval.
Gregor noted that to ensure that first-time borrowers are included in the financial system in a responsible and sustainable way, Home Credit Philippines’ loan products come with “safe lending” features, such as the option to avail of insurance along with the loan; a 15 day “cooling-off” period that allows customers to pay back the full loan at no added cost within this time period; customer-friendly repayment tools meant to address various financial difficulties; and Home Credit’s “Our Commitment” that promises full transparency on loan products with no hidden charges.
Since launching in Manila in 2013, Home Credit Philippines has seen rapid growth in its business of providing in-store financing of gadgets, appliances and other goods, and has served over 1.2 million customers. Its network of retail partners now spans more than 3,000 partner stores in Metro Manila and 36 provinces nationwide, where they offer 0% interest promos and other popular products.
At the same time, a new, important role is emerging for these social media sites: as a rich source of big data, and for finance companies, a new tool for approving loans and managing risk—especially for those borrowing for the first time.
Home Credit Philippines is a consumer finance provider that promotes the principles of financial inclusion and safe lending, providing world-class financing services to qualified customers, often first-time borrowers. Company’s core business is non-cash, no-collateral instore financing of purchases for customers, seeking to buy appliances and mobile devices (computers, tablets, laptops and mobile phones) through monthly installments without a credit card. Home Credit Philippines operates in Metro Manila and in 36 Philippine provinces, with a blueprint to expand its business to other Philippines developed cities. Home Credit Philippines is headquartered in Bonifacio Global City, Metro Manila, total employee strength is over 6,700 and keeps growing, with over 1,200,000 customers and counting served. Home Credit Philippines is part of Home Credit B.V. (HCBV), an international consumer finance provider. More information on Home Credit Philippines is available at www.homecredit.ph.
'Home Credit B.V. (‘HCBV’ or 'the Group') is an international consumer finance provider with operations in 11 countries where there is high potential to grow. Founded in 1997, we focus on responsible lending primarily to people with little or no credit history. Our services are simple, easy and fast. We operate in highly attractive markets with significant barriers to entry. We are a leading provider of consumer finance in selected countries. It is our experience and knowledge across the different markets, which sustainably puts us ahead of our competitors. We drive and broaden financial inclusion for the unbanked population by providing a positive and safe borrowing experience – the first for many of our customers. We promote higher living standards and meet borrowers’ financial needs. Our 120.2 thousand employees have so far served over 70 million customers through the vast distribution network comprising 270,537 points of sale, loan offices, branches and post offices. HCBV’s total consolidated assets reached EUR 14.7 million as at 31 December 2016. More information on HCBV is available at www.homecredit.net.
The majority shareholder (88.62% stake) of Home Credit B.V. is PPF Financial Holdings B.V., a 100% subsidiary of PPF Group N.V. (“PPF”). PPF invests into multiple market segments such as banking and financial services, telecommunications, insurance, real estate, metal mining, agriculture, retail and biotechnology. PPF's reach spans from Europe to Russia, the USA and across Asia. PPF owns assets of EUR 24.2 billion (as at 30 June 2016). More information on PPF is available at www.ppf.eu.
A minority stake (11.38%) of Home Credit B.V. is held by EMMA OMEGA LTD, an investment holding company ultimately owned by Mr. Jirí Smejc. More information on Emma Capital is available at www.emmacapital.cz.