Improving Financial Inclusion: Home Credit India

It has been an interesting two years for the Home Credit India (HCIN) team. The entity, which operates as a central bank-licensed Non-Banking Financial Company (NBFC) while providing insurance and other value-added services through partnerships, has been operational in India for ten years. .

The parent company was founded in 1997 in the Czech Republic and has since diversified into several other key markets. HCIN’s primary goal is to empower people to live the life they want now, with a focus on financial inclusion and responsible lending. Home Credit Group is known for providing regulated and trusted financial products and services to “unbanked or underserved” segments of the population through transparent loan applications, prompt credit scoring and responsible lending.

Home Credit India has approximately 5,000 employees and has steadily expanded its operations since entering in 2012, with its services spread across 625 cities across India. The company has a strong network of over 50,000 points of sale (PoS) and is growing with a customer base of over 14 million customers. Embracing digital transformation, HCIN has been rapidly expanding its digital presence and offerings since 2020, to establish an omnichannel connection with our products and services.

Transforming the Asian financial market

While India is generally considered a well-developed nation with a rapidly growing fintech industry and a wealth of tech talent, it is also home to a large unbanked population. A recent report by the Reserve Bank of India revealed that with 190 million adults currently operating outside the global financial system, India currently has the second largest unbanked population in the world. It is this dynamic that makes the region an excellent launching pad for HCIN’s products and services.

Milan Dolansky, Chief Digital Officer or CDO for Home Credit India, has led the institution’s digital transformation for five years. A former change manager for digital products and services at CSOB, a Czech bank in Prague, he has more than a decade of experience in the banking industry, improving services and promoting technological innovations.

He says of HCIN, “Our services are simple, easy and fast, with a focus on improving credit penetration through responsible lending, which empowers our clients, who typically come from a demographic that is in outside the banking system. Basically, we enable them to access finance or credit easily and securely in both online and offline mode. »

Dolansky points out that parent company HCI’s primary goal – particularly in India – is to work to improve financial inclusion and open access to the financial sector to the unprivileged subprime segment. “For this reason, many of our clients are first-time borrowers or new to credit,” he says, referring to the cultural aspect of lending in India, where those who have been bypassed by the system Traditional banks have in the past had to rely on loans from their communities and in an environment where loan sharking is rampant.

“In the Indian market, the credit card is an ambitious product,” says Dolansky. “There are 1.3 billion people in India but there are only tens of millions of credit cards. Thus, a large part of the population aspires to one day have a credit card. But banks are much less flexible about who actually gets one.

It is this rigidity of the traditional financial market that HCIN tries to solve by a certain number of innovations. “We view our role as one that provides pre-approved loan services to many more people,” he says.

As part of this initiative, HCIN plans to launch a virtual card in the coming months, which will allow its customers to enjoy the benefits of a pre-approved or flexible loan product. “It’s definitely an innovation for the market,” says Dolansky.

“We try to help our clients improve their lives and achieve their aspirations. Many of them buy their first smartphone, their first refrigerator, their first air conditioner. Our mission through lending is actually to improve people’s lives.

A developing space

In March 2020, as part of his role, Dolansky found himself managing the digital transition of a company that had typically served face-to-face customers and a workforce unaccustomed to the concept. remote working practices.

He explains: “When the pandemic started and the country went into lockdown, we had to act very quickly. But it was a challenge because of the way India operates when it comes to technology. In most developed countries, every household has a laptop or personal computer, for example. But although India has excellent mobile technology penetration, it is as if the country has skipped a step and “missed” the personal computer step.

This factor meant that Home Credit had to mobilize a comprehensive software and hardware operation to ensure that it could maintain its operations seamlessly and continue to serve its customers.

“Very few people have laptops at home,” says Dolansky. “They’re all very technically savvy and have fully embraced mobile and IoT technology – but you can’t do the same type of activity on a mobile phone as you can on a laptop.”

Initially, it was a huge task, as Dolansky explains: “Home Credit went through a period where we were literally shipping laptops and desktops across the country. It was hectic. But, after only two weeks, the company was completely isolated in terms of manpower and business was business as usual.

New opportunities in an emerging market

The period has, according to Dolansky, advanced Home Credit India’s digital transformation strategy. As a result of the transition, there are more innovative systems in place, which means the team has been able to launch new products and services despite having spent most of the past two years operating at distance.

Over the next few months, HCI will launch its brand new mobile super app, which will provide customers with a whole new point of service. “The main differentiator is that we give them apps that make sense for their lives – not just financial lending services.”

Users of the new HCIN Super App will be able to manage a host of daily tasks directly through the app, from shopping and taking out insurance coverage, to managing their loans. Dolansky says, “We are building an ecosystem where the customer is able to meet all of their daily needs through a platform that operates seamlessly and frictionlessly, through us and funded by us.

The digital ecosystem and strategic partners

As part of HCIN’s digital transformation journey, the organization has forged a partnership with HyperVerge, a leading AI documentation and data technology company. The collaboration means that application processes for clients have been completely streamlined: documentation is scanned, read by AI, and then archived for future use.

Dolansky says of the partnership, “We were looking for a partner to improve our customer journey. And, at that time, we knew that one of the biggest challenges for our customers was retyping information from documents. India is culturally very bureaucratic and paperwork is a huge part of life, but the goal of new fintech offerings is to make all of these processes seamless.”

HCIN discovered that HyperVerge’s OCR was already enabled to scan and aggregate Indian documentation data. The adoption of the technology has allowed customers to take three photos of their documents via their mobile phone, and the software platform does the rest, reading the information with 85% accuracy – which then simply needs to be checked for confirmation. once the inline fields are ready to view. “The process saves the client from having to enter many details, saving them time and stress,” Dolansky says.

Other ecosystem partners have been instrumental in the development of the super app with its access to numerous products and services. Currently, the majority of our partnerships are at the point of sale. As part of our expanded digital services, we will also forge new collaborations with affiliated companies. We also developed a whole new technology stack as part of the move to the new mobile app.

Customer orientation, data and KYC

HCIN’s culture is one of innovation through strategy. As part of its developments, the company seeks the advice of its users in the journey towards better products and services. Dolansky thinks fintech is as much about better targeting customer needs as it is about providing better services.

“We talk to our customers. Our customers are part of every little bit of the development process. Their feedback on an idea, before the development process begins, is essential. Later, when we have a pilot product, we test it again and get their feedback on, for example, the operation of the screen – is it user-friendly and intuitive enough? »

After the first official production begins, HCIN collects feedback again. “Working with the customer is the greatest inspiration for fintech innovation,” says Dolansky.

Ultimately, the goal is to provide better opportunities for people who have been rejected by the traditional banking system. “It’s about improving lives,” says Dolansky. “Providing a family with their first laptop or smartphone so they can study better and enabling home improvement loans so they can have a more enjoyable environment. These are things that before our services , were inaccessible.