Our business model

Our approach to sustainability balances short-term results with long-term growth. We are making our business model more effective and efficient and so better able to deliver shareholder value. Our profit comes from lending responsibly to new and existing customers while managing our cost base to ensure efficient use of resources. Increased profit comes from customer growth and lending more to those who have shown their ability to repay. High levels of service which drive customer satisfaction are therefore key to retention and growth.

Central to our approach is regular face to face contact with customers. Weekly home visits by our agents help customers stay in control of their repayments. Our agents are also best placed to judge potential new loan opportunities.

Why our business model works

Our business model is built on responsible lending. Before we advance a loan to a customer we ensure that we understand their circumstances and offer credit in an affordable, straightforward and flexible way.

  • our loans have affordable, transparent repayments;
  • we only lend amounts that customers can afford to repay;
  • we have a ‘low and grow’ approach. For new customers who pass our application scoring system we lend smaller amounts over shorter terms. Once customers have shown their ability to repay we may offer larger, longer-term loans;
  • it is not in our agents’ interest to offer loans that customers cannot repay; agent income is based largely on the amount of money collected;
  • customers have the option to repay their loan using our home collection service or by money transfer to a bank account;
  • weekly agent visits help customers manage their budgets. Repaying small amounts regularly establishes a routine of repaying their loans on time;
  • we only lend to those with a regular secure income and do not grant loans to people claiming unemployment benefit; and
  • financial education resources are made available to our customers.

Our business model has been operating for more than 130 years and is well established, resilient and profitable. We operate in emerging markets where demand for credit is growing and markets are relatively underserved.

There are two core elements to our home credit offer: a small-sum, short-term unsecured cash loan and an optional home collection service provided by dedicated agents. Customers can also choose to repay their loan by money transfer to a bank account.

Most loans are between £200 and £500 and repayable between 6 and 12-month terms. Typically we can deliver a loan within 48 hours from first contact.

Home credit is different from other financial products because of the high level of personal service provided by our agents. They visit our customers weekly in their homes to undertake credit vetting, provide loans and collect repayments.

Many of our customers have limited access to credit: we are helping to include them in the financial mainstream in a responsible way.

Our customers want to borrow a small amount of money, quickly and in a manageable and transparent way. They do not want to borrow more than they need.

Customers use their loans to manage their weekly household budget, replace or upgrade domestic appliances, meet school or medical expenses and make special purchases such as Christmas presents and holidays.

The households we serve have average to slightly below average incomes. Our customers are generally between 35 and 65 years old and about 60% are women. They are employed or have a regular, secure income from self employment or pensions. We do not lend to customers whose only source of income is unemployment benefit.

Many new customers have no credit history or may be taking a loan from a financial organisation for the first time. Those who have used credit before may have used store credit to purchase household items or borrowed from friends and family.

Our customers appreciate the fast, convenient and friendly home service our agents provide. The agent calls at the same time every week and saves them having to travel to a bank to make repayments. Our customers also take comfort from knowing that when they choose the agent service, the amount they owe does not increase even if they miss a repayment.

Our agents help us take a distinctive personal approach to lending compared to remote lenders. They are the public face of our business and build close relationships with customers through their weekly home visits.

More than two-thirds of our agents have been, or still are, customers; they often live within the area in which they work. This means they are more likely to know new and existing customers and understand their needs, and enables them to provide the best possible service and flexibility to our customers.

Over 65% of our agents came to work for us through the referral of another agent. More than 80% of agents are women and the majority are between 30 and 45 years old.

Agents visit new and established customers in their home to undertake credit vetting, provide loans and collect weekly repayments. Regular home visits also enable agents to monitor a customer's circumstances and be responsive to situations which may lead to missed repayments. Generally, agents are able to work the hours they choose and often combine their part-time agency work with another job or family commitments. This makes the job very convenient especially as agents tend to work in their own communities. Whilst some agents run their agency as a full-time business and can build up a customer base of up to 200 to 300 customers, it is more usual for an agent to manage approximately 70 to 100 customers.

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