Home Credit Philippines: Staying ahead of the game

MANILA, Philippines – While the economy continued to rely heavily on household consumption, more than 70 percent of Filipino adults are still “unbanked’’ or struggling to meet their financial needs due to lack of access to financial services.

Given this seeming gap, it made sense for the Czech Republic-based consumer financing company, the Home Credit Group to establish its presence in the country.

Home Credit Group was established in the Czech Republic in 1997. It now has operations in 11 countries including the Philippines and provides lending options to people with little or zero credit history.

The company opened its Philippine office in 2013 to take advantage of the large Filipino population and its insatiable demand for appliances, electronics and mobile devices.

“We’re quite excited to be here in the Philippines. We want to  help the people improved their lives and let them afford the things that they want. With Home Credit, they can spend more time with their family as they wash their clothes in a washing machine, or enjoy fresh food because they have a refrigerator, or watch from a nice TV and spend time together. They can also have a nice phone to connect with their friends,”  HCP head of product, marketing and business development Michal Smejc said.

“Our main market is the masses, the ones who usually don’t have credit cards or bank accounts. The first segment is the young people, the millennials, who want nice mobile phones and laptops. The second segment is the starting families, who wish to acquire their first house or apartment and need their own appliances,” he said.

Nearly three years after it set up shop in the country, the company lent nearly P2 billion to 320,000 borrowers  and provided employment to 2,500 Filipinos. HCP has partnered with over 220 leading merchants in the country, including SM Appliance Center, MemoXpress, Robinsons Appliances and Abenson.

No credit card, no problem

Putting a premium on risk management, a core skill the company has developed for  over 20 years and utilized in 11 countries worldwide, HCP is fueled by a business model that allows easy, fast and convenient financial options.

The company takes pride in accurately identifying the probability that a customer will pay on time.  “The process is quite fast. A borrower will  be interviewed by our sales agent and the application is sent for online evaluation. In 20 minutes, the client will know if his application is approved or not,” Smejc said, adding that the company is  trying to shorten the evaluation time to five minutes.

The current maximum finance amount is P60,000.  The company is trying to maintain the zero-percent interest program which is basically the same as the zero-percent interest program offered by the credit card companies. “But our customers don’t have to own a credit card,” Smejc said. The zero percent interest program is available in six- or nine-month installment options, depending on the   amount of the product.

“The zero-interest products are the best-selling ones, of course. For the gadgets, it’s mainly the mobiles. This year, we’ve run campaigns with Oppo and Samsung, which were a huge sale across the country. TVs are also very popular, as well as washing machines, refrigerators and laptops,” he said.

Encouraged by the healthy consumer demand in the country, the company plans to introduce more products. ‘’We are thinking of services like education financing and health care. We are also planning to   include home improvement,” Smejc said.

Financial literacy

“We are a responsible company. If a client wants to apply for a loan, the sales agent asks him questions like, ‘can you afford the monthly installment?’ and ‘how much money are you able to save?’ These questions ensure that we don’t over-indebt the customer,” Smejc said.

“We are serving mainly the mass market who don’t have access to financing, and we teach them how to use financial products. Through this, we make sure that people learn how to deal with money, how to budget, how to save some money,” Smejc said.

Aside from imparting budgeting knowledge at point-of-sale outlets, which reaches   a huge number of customers, HCP also organizes financial literacy activities in barangays and shopping malls.

“We realized that people are not into listening to lectures and they would probably not listen to us because they have more important things to do. So, we engage them through interactive seminars, through games mainly. We play with them as we teach them financial literacy. Then we do a short talk on how to budget. This is a complex program that we facilitate, but barangays are really welcoming us to do that. We are not selling anything there. Our intention is really to educate people,”   HCP public relations head Dmitry Borisenko said. At present, the program has reached around 1,000 families nationwide, with an average of two barangay visits per month.

HCP media relations director Jerome Mangahas said “we started as a core group of volunteers from the headquarters and our call centers. We’re starting small but we’re gradually expanding outside Metro Manila to provinces like Pampanga and Bulacan. We’re aiming high and we’re trying to reach out to as many barangays as we can.”

The team also produces children’s comic books that tackle the value of saving. “Most of the participants from barangays are mothers. Usually the seminar is conducted in daycare centers so they have their children with them. It’s like hitting two birds with one stone; we get to teach the kids as well,” he said.