The POS loan is the important product in our business model because for most of our customers it is the point of entry into Home Credit. Having acquired a customer through POS loan for durable goods, we start the long-term relationship and do repeat business with them.
Customers use POS loans to buy durable goods, such as fridges and washing machines, and pay in instalments. We sell POS loans primarily to first-time borrowers. The loan applications are processed through Home Credit employees based in the shop, or through shop assistants, while the underwriting takes place centrally. Home Credit has a unique client database and technological capability so it is able to expertly analyse data and the level of risk and deliver a response quickly and efficiently to the customer.
In certain markets, we also offer a specialised type of POS loan for buying motorbikes. These loans may be collateralised by the item purchased.
In mature markets, an initial POS loan is the first step in the process of defining a customer’s credit capacity and potential progress to credit cards, increased limits, and cash loans. In Asian emerging consumer finance markets, such as India, Indonesia and Philippines, POS loans drive the growth of our business.
The POS loan process
- A customer chooses an item in a shop, then sits down with a representative employed by Home Credit or by the shop, and together they complete a credit request.
- The application is submitted to Home Credit for processing.
- The credit request is processed in the scoring system. Home Credit sends a notification of approval or refusal of credit to the representative.
- If the request is approved, the customer signs a contract with Home Credit and buys the item, paying a first installment to the shop.
- Home Credit makes the payment for the item to the shop once the shop has submitted all the customer’s contract documents.
- The customer pays monthly instalments to Home Credit.
We offer POS loans through retail chains, independent retailers, and online shops.
We also provide customers with cash loans, typically as a cross-sell product to those individuals who proved they have repaid their former POS loan’s instalments on time and in full each month.