Home Credit targets P11B in receivables

With a wider geographic reach and a rapidly growing customer base, financial technology company Home Credit Philippines (HCPH) recently announced its bullish outlook for 2017: An ambitious target of P11 billion in receivables.

And it’s not a far off number at all for the company, Annica Witschard said in a briefing held recently in Makati City, given that HCPH has already hit its one-million customer mark this May, just five months after reaching 600,000.

“By all indications, the P11-billion receivables target… is doable,” she added. “The demand for affordable alternative financing from Filipinos is undeniable, and as a fintech company, we are more than happy to address this demand.”

Citing data from the Bangko Sentral ng Pilipinas and the World Bank, Witschard added that 86 percent of Filipino households were unbanked or do not have a banking relationship, while over 95 percent do not own a credit card—scenarios that make HCPH’s service even more attractive to the mass market, hence the company’s fast growth.

“The Philippines is unique: Although the unbanked segment is very large, the economy is also seeing a massive boom, with demand for consumer goods at an all-time high,” said HCPH chief financial officer Zdenek Jankovsky.

HCPH’s business model allows non-credit card owners, even first-time borrowers, to avail themselves of installment financing—with zero-percent interest promos—when purchasing items such as appliances and electronics.

The payment terms will vary depending on the item’s price, but Jankovsky said that one could even make a purchase of up to P60,000.

“Smartphones are our most popular commodity, and the average age of buyers is 24 years old. The average loan amount is around P9,000,” he added.

The whole application and approval process takes only around 20 minutes to finish.

“Risk management and technology: those are the two things that we’re good at,” said Witschard. “We find that people generally want to pay. And if you have any [financial] problems, we make it a point to talk to you to see how we can help [ease payment].”

She also credits their continued success to strategic tie-ups with their partners, both in retail and producer segments.

HCPH, which is part of the international group of companies Home Credit B.V. (HCBV), was established in Manila in 2013. HCPH now operates in 27 provinces nationwide, and has 5,600 employees—a number which they plan to increase to 7,000 by yearend.