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 products are tailored to our customers' needs and their ability to repay. We provide 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.

  • We only lend to customers who can prove they have a regular, secure income and can afford their repayments.
  • We closely cooperate with local credit bureaux to obtain information on customers’ existing debts in order to prevent their over-indebtedness and make a responsible loan offer. This is done in line with local legislation and with customers’ consent. 
  • 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.
  • Customer late-payment fees, where applicable, are fair and proportionate and they are not designed to constitute a primary revenue stream. They are primarily designed to re-engage with non-performing customers and apply only on late or non-payment.
  • 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. Our engagement with credit bureaux helps well-paying customers to establish a positive credit history.

We have worked hard to ensure that responsible lending is core to our business model from strategic decision-making and product design through to the millions of everyday interactions we have with customers each year. As an ethical business, engaging with our customers in a responsible way is extremely important to us. This is why we guide all we do by the following principles:

1. Advertising and marketing

We advertise our products in a clear and appropriate manner.

2. Affordability

We thoroughly assess  a customer's ability to repay the loan. We won't offer another loan to a customer if we do not think they will be able to repay it. 

3. Product suitability

We provide customers with products that are best suited to their needs.

4. Pricing

We offer customers fair and transparent pricing. Late payment fees, if used, are designed to re-engage with customers rather than as a primary revenue stream. 

5. Customer Communications

We communicate with customers in a clear manner and uphold their right to confidentiality. We select and train our agents so that they can serve customers to a high standard.

6. Collections and debt recovery

We collect loan instalments in a responsible manner and do what we can to avoid affecting a customer's  credit history adversely. In the case of external debt recovery we only co-operate with reputable agencies.

 

We are members of 45 local business and sector associations in all our home credit and digital markets. 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.

In our home credit markets 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; League of Hungarian Employers and Industrialists
  • Romania – Financial Companies Association in Romania 
  • Mexico – Mexican Association of Specialized Financial Entities; Mexican Microfinance Network ProDesarrollo, Mexican Institute of Financial Executives.

In our digital markets we are members of the following associations:

  • Estonia – Finance Estonia 
  • Lithuania – Lithuanian Consumer Financing Association (FINCO)
  • Mexico – Fintech Mexico
  • Poland – Financial Service Trade Association (KPF)
  • Spain – Spanish Fintech and Insurtech Association (AEFI).

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.

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

The latest study of financial well-being was conducted independently by Ipsos Mori, a leading international market research agency in October 2019. The survey was conducted amongst adults over 18 years old in seven markets. The survey focuses on how satisfied our customers are with their standard of living, their primary concerns, confidence in their local economy, views on NBFI loans, 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.