Our key strengths

Market-leading positions in attractive markets

We are a leading, international provider of consumer finance in Central and Eastern Europe and Asia. Founded in 1997, we are now established in 11 countries: the Czech Republic, Slovakia, the Russian Federation, Belarus, Kazakhstan, China, India, Vietnam, Indonesia, the Philippines and the United States.


Russia

  • Number one point-of-sales (POS) lender
  • Third-largest cash loan provider
  • Fourth-largest branch network
  • Eighth-largest retail deposits holder
  • Ninth-largest credit card provider

Czech Republic

  • Second-largest non-banking provider of cash loans
  • Top three POS lender
  • Top three cash loan provider

Slovakia

  • Number one non-banking credit card provider
  • Number two provider of cash loans
  • Number three in POS loans

China

  • Largest POS lender

Kazakhstan

  • Top three POS lender

Vietnam

  • Number one POS lender

We are a responsible lender to people with little or no credit history, who may be underserved by traditional banks. Our services are simple, easy and fast.

Track record of successful new market entry

We are a leading, international provider of consumer finance in Central and Eastern Europe and Asia. Founded in 1997, we have achieved strong positions in attractive established markets and we are a pioneer in geographic expansion into new markets. We were among the first movers into emerging, high-potential markets with rapid growth such as China and Vietnam. We now operate in 11 countries while retaining a focus on achieving profitable growth. Our expansion policy combines greenfield activity, acquisitions, and joint ventures.

Sustainable business model

Our sustainable competitive advantages have enabled us to deliver earnings growth, strong free cash emergence and dividend capacity.

We are a healthy, proactive company, maintaining good profitability even through the financial crisis. We achieve this performance by closely monitoring the changing economic backdrop and reacting swiftly to market movements. We have a history of sound risk management and a variable cost structure, which, combined with successful product development, serves to increase our market share and improve the quality of our loans.

Superior data capture and analysis

Information technology is at the core of Home Credit Group’s business. Our unique client database was founded in 1997 and holds the credit records of 70 million customers (as at 31 December 2016) – more than a third of households in Russia and the Czech Republic.

Historically, we have relied on our own country databases of credit histories and Home Credit Group’s statistics database to assess prospective customers’ risk profiles. In 2008, however, we started working with established credit bureaus. This decision was made with the objective of further improving our cross-check scoring and underwriting procedures. For example in Russia, Home Credit and Finance Bank cooperates with Equifax, Experian, Russian Standard and NBKI.

The size of our customer database and credit history records directly affects the accuracy with which Home Credit can assess credit risk and underwrite loans. Our in-house proprietary system therefore has the unique ability to manage risk on a mass scale with a quick decision process. Our data analysis translates into superior risk assessment, more cross-selling opportunities, and better collection performance. These factors in turn enhance our financial results and enable us to offer competitively priced credit.

Unique origination capability

Our far-reaching and highly efficient distribution network presents our competitive advantage. We leverage our widespread network by developing an excellent customer relationship management programme, providing pertinent cross-selling opportunities and offering a carefully-balanced product mix. These prospects are further enhanced by our state-of-the-art IT system, enabling credit decisions to be processed in the shortest possible time.


Extensive multi-channel network effectively originating new clients

Our subsidiaries use a variety of direct and indirect distribution channels to optimise accessibility to end customers. We have a broad network of retail partners in each country – a total of 270,537 distribution points (as at 31 December 2016). This extensive network is made up of a wide variety of elements including:


POINT-OF-SALES (POS)

We work with a wide variety of partners to offer in-store services to provide point-of-sales loans. Our partners are both independent and nationwide retailers, and include hypermarkets, electrical retailers, motorbike and car dealerships, and furniture shops. Our long-term relationships with all types of retailers are an essential part of our competitive advantage. Our in-store presence is provided by full-time Home Credit employees or contractors employed by the retailer, who can use our state-of-the-art IT systems to process loan requests in minutes. Some of our retail partners across our geographies include:

  • Russia: Eldorado, Tekhnosila, Svaznoy, Shatura, Evroset China: Gome, Sunning, Tesco, D.Phone, Leyu, Zhongyu
  • Czech Republic/Slovakia: Tesco (exclusive partnership, providing consumer finance services under the Tesco Financial Services brand), Euronics, Samsung, Mironet, Mountfield
  • Indonesia: Oke shops, Global Teleshop, Electronic Solution
  • Philippines: Memoxpress, Abenson, Automatic Centre
  • Belarus: Elektrosila, Svaznoy, Na Svyazi
  • Kazakhstan: Tekhnodom, Sulpak, Mechta
  • Vietnam: Yamaha, Nokia, Samsung, The gioi di dong, Vien Thong A, FPT, Viettel, Nguyen Kim, Cho Lon

Loan shops

These are smaller sales points, predominantly in shopping centres. They enable the servicing of existing POS clients, as well as providing cross-selling and up-selling opportunities. They often provide selected cash loan products to new customers.


Branches

We have one of the largest networks of bank branches in Russia, and are one of the few players to offer nationwide coverage, including in the most remote regions. Our branches vary in size depending on what is suited to each location, and provide the same level of service and product offering as traditional banking branches, in a more cost-effective way. They offer the full portfolio of our loan products and selected retail banking products. We are currently strengthening our cost-effective nationwide branch network in Kazakhstan and Belarus.


Internet and phone applications

Across our global network, the internet is becoming an important customer service channel. We are committed to continually innovating to enrich the customer’s online experience. We work with retailers to provide financing for durables sold via their websites and with major online cash loan application aggregators. We also offer cash loans over the phone and we have launched a pilot for online non-cash lending.


Post office branches

In Russia, Kazakhstan, the Czech Republic and Vietnam we also operate in post office branches. This facility is convenient for our customers, providing increased accessibility to our services across these countries – and proving a significant competitive advantage.


Other partners

We work with additional partners such as brokers, insurance companies and employers through payroll services.


Responsible and effective cross-selling

Our initial contact with customers very often develops into a fruitful long-term relationship because we can cross-sell as clients develop their financial literacy and as their needs evolve. We are supported by large-scale customer relationship management (CRM) technology which covers 70 million customers (as at 31 December 2016).


Diversified product mix

To serve our customers’ growing financial needs we continually develop new products to follow their financial lifecycle. After assessing the credit capacity of new customers, we can go on to offer POS loans at shops and cash loans and credit cards via branches, phone, post offices and online channels; and we are increasingly operating deposit accounts at branches.


IT System supporting origination

Our extensive network is powered by state-of-the-art IT systems which allow credit requests to be processed far more swiftly than is possible with traditional lenders. IT is at the core of Home Credit’s business; our centralised IT system is uniquely tailored to serve the markets in which we operate.

Underwriting capability and disciplined risk management

Our subsidiaries benefit from a central risk management structure and customer approach that are calibrated to the specifics of each local market. Our historical customer database provides unique support for strengthening risk management and maximising cross-selling opportunities. We take a conservative approach to provisioning and we nurture a strong risk management culture from within. Employees’ remuneration is linked to development of the quality of the business’s assets.


Informed credit decisions

The credit underwriting process involves the verification of customer data, combined with complex scoring models that take into account both risk and profitability to determine whether an applicant is eligible for a given product and, if so, at what price. Through this process, we generate scorecards designed for each product and customer segment.

The majority of our loan applications are considered on the basis of an application form , together with an inspection of the applicant’s passport and an additional form of identification (typically, a driving licence or insurance or tax certificate). In some countries photos of applicants are taken as part of the credit underwriting process. Information from the application form is entered into an online, automated scoring system by Home Credit employees, or by the authorised employees of our retail partners, via a secure internet connection.


High-tech IT capabilities

Our system can process more than 200,000 applications a day. In assessing a loan application, the automated scoring system considers the personal data and credit history of the applicant, including the amount of his/her indebtedness and the rate of any increase in indebtedness. Information provided by the applicant is generally cross-checked with information in our customer database, publicly available databases (such as telephone directories and major credit bureaus) and references from the applicant’s employer, or a member of their household identified in the application.


Dynamic underwriting approach

Our underwriting approach is based on risk-adjusted return on investment, calculated using the applicant’s probability of default based on credit and fraud risk, in addition to product parameters and the history of the distribution point from where the customer applies for a loan. The applicant must achieve a score above a certain level that reflects the type of product requested. This cut-off level varies depending on, among other things, the profile of the applicant, the product applied for, and the duration and size of any amount that we will lend. These levels are adjusted regularly in light of the actual performance of the portfolio. The applicant is assigned to a certain risk group on the basis of the scoring results. The application is then approved, declined or sent for verification. The score is refreshed on the basis of subsequent verification results.


Best-practice collection

Later in the process, we have expert collection systems in place that follow best-practice collection methodology. These help us manage our business effectively and they help customers manage their budgets. We have complex systems in place to avoid late payments, and numerous options to assist customers who need adjustments made to their payment plans. These comprise an early warning system, pre-collection, segmentation, debt restructuring, and adequate staffing and training of the collection team. We manage difficult situations in the most sensitive way possible. We deal with cases of financial difficulty compassionately and positively in order to help the customer manage the amounts they owe.


Fraud prevention

We classify fraud into three types: merchant fraud, customer fraud and organised fraud. Our risk management teams supervise Home Credit’s and retailers’ sales teams and their processes to prevent fraud. We have developed fraud prevention procedures accordingly.


Our anti-fraud system is based on:

  • Stringent retail partner screening
  • Continuous tracking of fraud in POS clusters and individual POS points
  • Regular management of retailer performance
  • Focused monitoring of selected points-of-sale
  • Comparing current activities to known fraud patterns

We continuously manage customer loan accounts to optimise the balance of revenue and risk by collecting performance data on each customer after a loan is approved, such as the timeliness of repayments and the number of transactions and interaction with the company; and we supplement this with relevant data from external sources.

Customer focus

We take pride in always putting our clients’ needs first.


Sustainable customer relationships

Our ability to create long-term sustainable relationships with our customers based on mutual respect and fairness is at the heart of our success. This success is built on the trust of our customers, retailers, staff, regulators and society more broadly. In turn, their trust is based on positive experiences, fulfilling our customers’ expectations, and the confidence that our organisation will behave fairly. We value the trust of our customers and we aim to create the best possible customer experience by applying our Global Values wherever we operate.


Responsible lending

We are committed to responsible lending. This means acting fairly and responsibly in all our dealings with our customers, helping them understand their commitment and always checking if the loan is suitable for them by considering their specific circumstances.


Customer charter

We have made a global commitment to allow all our customers, in addition to their basic statutory rights, to withdraw from a loan if they change their mind within 14 calendar days and we have introduced a number of other guarantees for our customers through a voluntary charter.


Diversified product mix

Our overall strategy is to become the provider of choice to our existing and prospective customers for all their consumer finance and retail banking needs. As part of this strategy, we seek to provide user-friendly and easy access to our retail services by streamlining the range of products available. We have developed an easy-to-understand, standard set of products including POS loans, cash loans, credit card loans and deposits which can be marketed simply and intuitively to customers.

Home Credit offers a number of additional services to its clients including 24-hour call centre support, SMS alerting, internet banking, lending over the internet and applications for mobile devices.


Our customers

We serve 20.1 million active customers (as at 31 December 2016).


Financial inclusion

We advance financial inclusion by serving customers that other financial services providers do not serve, helping build their credit histories. In addition, our financial literacy activities spread the understanding of consumer finance.

A leader in responsible lending and promoting financial literacy

We pursue best practice and transparency in all our business operations. We act with responsibility and integrity, complying with applicable laws and regulations; applying internationally accepted standards of responsible business conduct; and respecting the traditions and cultures of the communities and countries in which the Group operates.

Home Credit Group believes that providing small affordable loans is important in teaching and spreading financial literacy in emerging markets. We want to help our customers, and the communities in which we operate, to understand how to borrow safely, how to find out what amount is affordable for them to borrow and how to manage their family budget.

We started our financial literacy programme in Central and Eastern Europe by offering workshops and seminars to potential customers who would otherwise have been excluded from financial services access because of their location or income levels. Based on our experiences from these events we brought our financial literacy initiatives to Asia, where we use a similar approach to promoting financial literacy, while always tailoring the initiatives to each country’s specific needs.

Experienced management team

The Group and its subsidiaries are led by experienced management teams with proven track records of combining global business know-how and strategy with local expertise and adjusting operating models to fit with local requirements.


Training

We believe that our incentive and training programmes enable us to develop and retain highly qualified employees at all levels. Home Credit has a number of initiatives to foster the professional development of its employees, and is committed to advancing knowledge and increasing the value of the individual employees' experience and expertise.


Incentives

We have an incentive-based motivation system, consistent with rewarding individual talent as well as aggregate performance, and offer a comprehensive benefits package commensurate with being an employer of choice.


Remuneration

We ensure our remuneration policies and practices align with long-term stakeholder interests and encourage and reinforce behaviour consistent with our corporate culture and values.

Strong and diversified funding base

Home Credit Group's funding base is strong and diversified. It consists of customer deposits, debt securities and wholesale bank loans.

External funding composition:Subordinated debt 5%, Bonds and notes issued 5%, Bank loans 29%, Deposits from customers 61%, Home Credit B.V. consolidated financial statements as at 31 December 2015
Source: Home Credit B.V. consolidated financial statements as at 31 December 2015

To support the growth of our business in the medium term, we will continue to diversify our funding base in terms of markets, types of instruments and maturity, and to attract flexible and stable funding sources based on long-term, mutually beneficial relationships with investors. Our management believes that maintaining a substantial share of customer deposits in its funding base will help Home Credit to support its lending growth and secure its strong financial position. In countries where we are rated (Home Credit and Finance Bank in Russia and SB JSC Home Credit Bank Kazakhstan), we have solid ratings from the leading rating agencies.