An overview of IPF’s view on
Responsible Lending

Our commitment to customers is embedded into our company and the way we do business. 

Our product is tailored to the needs of our customers; we provide transparent loans with clear guidance at the outset on how much the customer will repay. We practice forbearance when a customer may have temporary difficulty in making a loan repayment and customers who take our home service have the reassurance that they will not incur default charges.
 
  • We only lend to customers who can prove they have a regular, secure income and can afford their repayments.
  • We practice forbearance. Customers who choose our home credit service incur no extra charges for missed or late repayments. We provide transparent loans with clear guidance at the outset on how much the customer will repay
  • We promote financial inclusion. We lend to customers who are often underserved by mainstream banks, helping them to access credit which may be unavailable elsewhere. We also work with credit bureaux to help well-paying customers establish a positive credit history.
  • Our agent model helps us to lend responsibly. Agents form relationships with customers, allowing them to assess their circumstances and ability to repay. Agents are rewarded primarily on loan collection rather than sales which helps to ensure that they loan only what customers can afford to repay.

Our businesses are members of local sector associations and they obey their codes of conducts and principles of responsible lending. We use our membership in sector associations for a dialogue with other credit providers and for transparent dealing with decision makers and regulators. We always operate in line with local legislation and cooperate with local regulatory bodies and consumer protection authorities.

We are members of the following associations:

  • Poland - Foundation for the Development of the Financial Market
  • Czech Republic - Czech Leasing and Financial Association 
  • Hungary - National Association of Financial Enterprises
  • Bulgaria - Bulgarian Consumer Credit Association 
  • Romania - Financial Companies Association in Romania - membership subject to General Assembly approval in March 2017
  • Mexico - Mexican Association of Specialized Financial Entities

We keep an open dialogue with local NGOs and consumer associations and welcome any constructive cooperation to elevate standards of non-banking consumer lending and eliminate unfair practices across the sector. We also cooperate with media and sector associations to advocate for meaningful regulation of consumer lending for better protection of customers. In many markets we collaborate with both NGOs and consumer associations on issues such as financial education, mystery shopping of unfair practices or awareness raising of legislative changes in consumer lending.

Thorough affordability assessment is at the heart of responsible lending and we make sure that our credit decisions are based on customer's preferences and in line with their means to repay the credit obtained. In order to do that we consult local credit bureau with information on customer's existing debts to prevent their over-indebtedness. This is done in line with local legislation and with customer's consent. 

Membership in local credit bureau

 

Poland yes
Czech Republic yes
Hungary yes
Bulgaria yes
Romania yes
Mexico yes

Above operating in line with local regulatory requirements we aspire to act as leaders in responsible lending among non-banking credit providers. We are committed to act responsibly, ethically and in the best interest of our customer at all times and in all phases of our business relationship. We build our responsible lending approach along the following segments. 

  • Advertising
  • Affordability assessment
  • Product suitability
  • Product construct
  • Customer communications
  • Customer representative capabilities
  • Collections
  • Refinancing 

We regularly conduct studies and surveys on Group and markets level to analyse consumer preferences in borrowing credit and trends in financial products. We are interested in information on overall indebtedness of population and preferences of each customer segment. Based on results, we are able to customise our product offer, customer service but also react with our financial education activities. Our aim is to be a respected and prefered provider of credit to our customers.   

The latest study of financial well-being was conducted independently by GfK, a leading international market research agency in June 2016. The survey was conducted amongst IPF’s customers in eight markets among more than 9,000 IPF customers. The survey focuses on how satisfied our customers are with their standard of living, their primary concerns, economic confidence, views on retirement planning, as well as their trust in the financial sector. The primary motivation for this report is to give our customers a voice in the on-going debate on financial inclusion amongst key decision makers and influencers. It also helps IPF to further understand our customers, their concerns and needs; building on over one hundred million home visits that we conduct every year, so we are even better able to deliver for each and every one of them.

One of the areas for concern highlighted by the report are the levels of savings across markets. In most European markets over 40% of IPF customers don’t have any cash savings. This proportion is highest in Bulgaria and Hungary, with 69% and 59% having no cash savings respectively.