Home Credit: gathering, matching
consumers’ information on social media crucial to risk management for financing
first-time borrowers
DID YOU KNOW that we Filipinos spent an average of
4 hours and 17 minutes per day on social media? With this amount of time we are
spending on social media than any other country in the world, connecting
people and building communities thru social media platforms Facebook, Viber and
Instagram is more potent than ever.
But did you know that your social media account can
strengthen your loan application? As a new tool for for finance companies to use for approving loans and managing
risk—especially for those borrowing for the first time since it’s a rich source
of big data.
“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,” remarked Leos Gregor,
Head of Risk at Home Credit Philippines, a Prague-based finance technology (fintech)
company that allows consumers to purchase smartphones and other goods on
installment even without a credit card.
“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,” Gregor added.
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.
“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,” he said.
“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,” Gregor added.
Safe
lender
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.
