Home Credit launched its India operation in 2012 as a smartphone loan provider and later expanded its offering to consumer durables and personal loans. In 2016, the company crossed the 1 million customer mark driven by pan- India presence across major markets. It added another 4 million customers in 2017 alone. Over the years, not only the company’s customer base has improved, but its network too has grown rapidly.
Last year, Home Credit unveiled its brand new identity and logo with an aim to reach out to customers effectively and easily through advanced technology.
In an interview with exchange4media, Tomas Hrdlicka, Chief Marketing Officer, speaks about their expansion plans, opportunities in Tier I and Tier II cities and how NBFCs have created a space in the financial sector.
Edited excerpts:
With over five million customers in five years, how is the road ahead for Home Credit India? What expansion plans and the quantum of growth do you have in mind?
Home Credit India has definitely come a long way since we launched our India operations in 2012. The first three years were all about preparing for business, finding out the right business model and gaining insights from the market. The next few years were utilized in understanding and putting into practice these important learnings. With over 5 million customers in the last five years, Home Credit India has emerged as one of India’s leading and fastest growing non-banking financial companies. Starting with just 5 point-of-sales (PoSs) to crossing the milestone of 20,000 in December, our network has expanded manifold in the last six years. The pace of growth can be gauged from the fact that while we had one million customers in four years, we added four million in just 2017 alone. We are targeting to double or possibly triple the customer base.
As a brand, Home Credit is a well-known name in metro and urban and semi-urban markets. Over the last few years, the company has also been focusing on tier II and III cities. Do you see the acceptance of brand in these cities?
The scale and size of opportunity is huge, both from the perspective of expanding reach and catering to unbanked and underserved across the country. Tier II and III cities constitute an important market for us, as much as metros and big urban markets. Nearly 40% of our business comes from metros and tier I markets and the balance from tier II and III cities. As we expand, we see a lot of business potential in emerging markets where many other NBFCs do not have much presence. Customers in such markets need access to credit and as consumer finance services provider, we understand the difference our financial solutions make to the lives of our customers.
NBFCs are expanding their market share as banks grapple with bad loan problems. This has generated opportunity for NBFCs to ramp up their operations. Do you agree?
The sector is quite diversified; it is undergoing a rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. The last decade or so has witnessed NBFCs expanding their retail book at a much faster pace and delivering credit to customers at competitive and affordable rates. With NBFCs using robust analytics-driven credit-underwriting processes, their risk assessment and customer profiling have improved significantly. Irrespective of the bad loan issue impacting the domestic banking sector, NBFCs like us continue to focus on expanding access to credit to stay ahead of the curve.
Last year, Home Credit India launched facilities such as mini cash loans, instant loan approval and mobile app for expanding its customer base. How does Home Credit plan to use digital medium to enhance customer experience?
Technology is a big enabler in enhancing experience of customers and we at Home Credit believe that digital is probably the most appropriate medium for achieving that. Given our focus on financial inclusion, we believe that digital can help push formal lending in unbanked and underpenetrated markets. When it comes to leveraging digital technologies to make our product offerings attractive for our customers, we definitely have a slew of initiatives lined up. In fact, we took the first step in our digital journey last year when we launched our mobile app in April 2017. Going forward, we plan to enhance the mobile app with new product features, including a facility for allowing customers online signing for personal loans and enabling them to check credit scores. Another key digital initiative launched recently is the facility for customers to apply for personal loans through mobile app. The money is disbursed instantly.
Home Credit started with smartphone loans and then moved to two-wheeler and consumer durable loans. Which other verticals are you looking at for expansion?
We have been quite successful with financing for smartphones. Looking ahead, we are looking to repeat this success with other commodities. We are definitely planning to expand into home appliances segment, as we see huge opportunity there.
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