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

We advertise products in a fair and clear manner ensuring that customers are informed of our key terms and conditions. 

2. Affordability Assessment

We thoroughly assess customers’ ability to repay before granting a loan.

3. Product Suitability

We provide customers with products which are well suited to their needs with clear and transparent pricing structures relating directly to the services used. Additional products and features will be added only where requested by the customer and where the customer is eligible to benefit from those products.

4. Pricing

Customer late-payment fees are fair and proportionate and they are not a primary revenue stream. We strive to offer customers products that fit their needs with suitable term, service charge and complementary options. 

5. Customer Communications

We communicate with customers in a transparent, proportionate and responsible manner.  We respect their right to confidentiality.

6. Customer Representative Capabilities

We take measures to ensure IPF representatives are willing and able to treat our customers fairly.

7. Collections and debt recovery

We collect loan instalments in a responsible manner upon agreement with the customer to ensure timely payment in order to maintain customers’ good credit history. 

8. Refinancing

We do not refinance debt to customers’ detriment in ability to pay or level of indebtedness.

We are members of local sector associations and 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.

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

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

  • Estonia – Finance Estonia 
  • Lithuania – Lithuanian Consumer Financing Association (FINCO); Fintech branch of the Baltnet Association.
  • Poland – Financial Service Trade Association (KPF)
  • Spain – Spanish Fintech and Insurtech Association (AEFI); Spanish Association of Digital Economy (Adigital); 

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 GfK, a leading international market research agency in November 2018. The survey was conducted amongst consumers in seven of IPF’s 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.