Home Credit India - July 2022

HOME CREDIT INDIA

This is the headline of Improving financial inclusion: the feature Home Credit India DIGITAL REPORT 2022

DIGITAL REPORT 2022

IN ASSOCIATION WITH: IN ASSOCIATION WITH:

IMPROVING FINANCIAL INCLUSION: HOME CREDIT INDIA 2

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HOME CREDIT INDIA

2012

year founded

Approx 5K number of employees

65%

increase in numbers of borrowers served – from 8.5MM in 2018 to 14.2MM in 2021

40%

of customers are first-time borrowers with no credit history

67%

Digitalisation has reduced average loan disbursal time by 67%

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Home Credit India is transforming the lives of its customers through new technologies and products that promote financial inclusion t has been an interesting two years for Embracing digital transformation,HCIN is fast the team at Home Credit India (HCIN). expanding its digital presence and offerings The entity, which operates as a central since 2020, to build an omni-channel bank licensed Non-Banking Finance connection with our products and services.

Company (NBFC) while also providing insurance services and other value-added Transforming the Asian services through partnerships, has been financial marketplace operational in India for the past ten years.

While India is generally considered a wellThe parent company was founded in 1997 developed nation with a fast-growing in the Czech Republic and has since branched fintech industry and a wealth of technology out into a number of other key markets. talent, it is also home to an extensive HCIN’s core aim is to empower people to unbanked population. A recent report live the life they want now, by focusing on by the Reserve Bank of India revealed financial inclusion and responsible lending. that, with 190 million adults currently Home Credit Group is known for providing operating outside the global financial regulated, trusted financial products and system, India has the second largest services to the ‘unbanked or underserved unbanked population in the world. It is this parts of the population’ through seamless dynamic that makes the region an excellent loan applications, fast credit scoring and launchpad for HCIN’s products and services. responsible lending.

Milan Dolansky, Chief Digital Officer or Home Credit India CDO for Home Credit has an employee base India, has been leading of around 5,000 people the institution’s digital and has been consistently transformation for the expanding operations past five years. Formerly since its entry in 2012, the change manager with its services spread for digital products and across 625 cities across services at CSOB, a India. The company has Czech bank in Prague, a strong network of over he has over a decade of 50,000 point-of-sale (PoS) experience in the banking locations and is growing industry, enhancing MILAN DOLANSKY with a customer base of services and driving CHIEF DIGITAL OFFICER, over 14 million customers. technological innovations.

HOME CREDIT INDIA

“THERE ARE 1.3 BILLION PEOPLE IN INDIA BUT THERE ARE ONLY TENS OF MILLIONS OF CREDIT CARDS”

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He says of HCIN: “Our services are simple, easy and fast, with a focus on enhancing credit penetration through responsible lending, which empowers our customers, who generally come from a demographic that is outside of the banking system.

Basically, we enable them to access financing or credit easily and safely, in both online and offline modes.”

“WE ARE OFFERING CUSTOMERS APPLICATIONS THAT ARE MEANINGFUL TO THEIR LIVES” MILAN DOLANSKY

CHIEF DIGITAL OFFICER, HOME CREDIT INDIA

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Dolansky points out that the main purpose of the parent HCI – especially in India – is to work on improving financial inclusion and opening access to the financial industry to the unprivileged segment of subprime. “For that reason, a lot of our customers 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 traditional banking system, have, in the past, had to rely on loans from their communities, and in an environment where loan shark practices are rife.

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

It is this rigidity in the traditional financial marketplace that HCIN is attempting to address through a number of innovations.

Milan Dolansky TITLE: CHIEF DIGITAL OFFICER INDUSTRY: FINTECH

EXECUTIVE BIO

LOCATION: GURGAON, HARYANA, INDIA Milan Dolansky joined Home Credit India in June '17 as Head of Online with the aim to build the digital side of the business and bring Home Credit to a digital age.

Milan has over 15 years of experience in the banking industry, making online strategies, analysing the scope as well as developing suitable electronic channels. His expertise lies in his project visualisation from a birds-eye view, which helps to detail the project plan & also to analyse & shape further requirements. He believes that having the right team, doing your job with perfection and honesty, and making right decisions at the right time are the key to success.

His prior experience involves risk management, process management and business architecture which enhances stability and effectiveness of delivered projects. Milan has worked with CSOB Bank, Absolut Bank, KBC Group and many other leading organisations in the past.

Onboard everyone, but not just anyone

Ensure customers are who they claim to be and onboard them across 195+ countries in less than 10 secs with high accuracy AI models.

HyperVerge has verified

600M+ identities so far!

HyperVerge | The Complete Identity Verification & AML Solution 

Higher conversion rates due to HyperVerge’s passive liveness technology.

HyperVerge: The Complete ID Verification & AML Solution HyperVerge’s visionary and dynamic CEO Kedar Kulkarni talks partnership, frictionless onboarding, and rapid growth HyperVerge is a classic Silicon Valley-type start-up. The company started off when a bunch of highly gifted and driven kids found initial success in computer vision AI and came together to solve fundamental problem. Its CEO Kedar Kulkarni says, “The company launched at a moment when financial services providers woke up to the fact that ease of access, meeting the needs of every individual irrespective of their background, location or credit history would be a key driver to success in a competitive market.”

Today HyperVerge is delivering results for customers from Vodafone to Home Credit.

Headquartered in California, it has its offices in Bangalore and a growing presence in SEA and Africa. “We work with companies that need to onboard users, ascertain the identity of every customer or agent on their platform and cut fraud. Our homegrown AI ensures the customer has a great experience. HyperVerge solves the ‘know-your-customer’ (KYC) imperative for these clients.”

HyperVerge works with Home Credit in India among many countries. Its drive to enable the financially deprived in the world to engage with affordable finance resonates with HyperVerge’s mission to increase accessibility to the left-behind billions in India and across the globe. “Home Credit is a great partner for us, and one we love working with. Our teams are constantly working together to exchange ideas and co-innovate. They were looking for an ally to help them achieve key business objectives with a frictionless onboarding process. We started with their digital channel, but then moved on to their offline channel as well, to improve the back-end processes for their staff. Now we are working together on new strategic initiatives and have a roadmap for collaboration over the next twelve months.”

“Seamless customer experience, cost of service, expansion of the customer base and enabling smaller ticket loans are vital goals.

At the same time, compliance with complex and variable regulations can also be addressed using HyperVerge technology,” says Kedar Kulkarni – another matter he is now discussing with Home Credit.

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HOME CREDIT INDIA

“OUR MISSION IS TO EMPOWER PEOPLE TO LIVE THE LIFE THEY WANT NOW” MILAN DOLANSKY

CHIEF DIGITAL OFFICER, HOME CREDIT INDIA

50K+

digital point-of-sale touchpoints for customers

95%

of retailers are small family-owned businesses

45%

of the consumer loans offered at zero interest

40%

of customers return to us for repeat business

“We see our role as one that brings preapproved lending services to many more people,” he says.

As part of the initiative, HCIN has plans for a virtual card launch in the next few months, which will allow their customers to have the benefits of a pre-approved or flexible loan product. “This is definitely an innovation for the market,” Dolansky states.

“We are trying to help our customers improve their lives and fulfil their aspirations.

A lot of them are buying their first smartphone, their first fridge, their first AC unit. Our mission is to empower people to live the life they want now.”

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 customers face-to-face, and a workforce that was unused to the concept of remote working practices.

He explains: “When the pandemic started and the country locked down, we had to move very quickly. But it was a challenge because of the way India operates regarding technology. In most developed homecredit.co.in

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countries, every home has a laptop or home computer, for example. But although India has excellent mobile technology penetration, it's as though the country skipped a step and “missed out” on the home computer stage.”

This factor meant that Home Credit had to mobilise an entire software and hardware operation to ensure it could maintain its operations seamlessly and continue serving its customers.

“Very few people have laptops at home,” Dolansky says. “They are all very technically proficient and have fully embraced mobile and IoT technology – but you can't do the same sort of business on a mobile phone as you can on a laptop.”

Initially, it was a massive task, as Dolansky explains: “Home Credit went through a period of time where we were literally shipping laptops and desktops all over the country. It was hectic.” But, after just two weeks, the company was fully remote in terms of its workforce and it was business as usual.

New opportunities in an emerging marketplace The period has, according to Dolansky, driven forward Home Credit India’s digital transformation strategy. As a result of the transition, there are more innovative systems in place, and this has meant the team has been able to launch new products and services despite having spent the best part of the last two years operating remotely.

Over the next few months, HCI will be launching its brand new mobile superapp, which is going to offer customers an entirely new point of service. “The main differentiator is that we are offering them applications that are meaningful to their 12

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lives – and not only the services of financial lending.”

Users of the new HCIN super app will be able to manage a multitude of daily tasks directly through the app, from shopping and arranging insurance cover, as well as managing their lending. Dolansky says: “We are building an ecosystem in which the customer is able to fulfil all their daily needs through one platform that functions seamlessly and frictionlessly, through us and financed by us.”

HCIN engaged with three million people on financial literacy via in-house Paise Ki Paathshala or Personal Finance class website

The digital ecosystem and strategic partners As part of HCIN’s digital transformation journey, the organisation has forged a partnership with HyperVerge, a leading AI documentation and data technology company. The collaboration means the application processes for customers have been completely streamlined: documentation is scanned, read

HCIN donated 30,000 respirators and 1.8 million surgical masks to India’s Ministry of Health and Family Welfare at a time of global mask shortages HCIN funded medical and hygiene kits for 10,000 people living in poor areas HCIN partnered with the Don Bosco Network to distribute basic nutrition packages to 20,000 migrant workers homecredit.co.in

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“WE’VE DEVELOPED AN ENTIRE NEW TECHNOLOGY STACK AS PART OF THE NEW MOBILE APPLICATION” MILAN DOLANSKY

CHIEF DIGITAL OFFICER, HOME CREDIT INDIA

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by AI and then filed for future use.

Dolansky says of the partnership: “We were looking for a partner to improve our customer journey. And, at that point in time, we knew that one of the biggest struggles our customers have is to retype information from documents. India culturally is very bureaucracy oriented and paperwork is a big part of life. But the aim of new financial technology offerings is to make all those processes frictionless.”

HCIN discovered that HyperVerge’s OCR was already enabled to scan and aggregate the data on Indian documentation. The

HOME CREDIT INDIA

partnerships are in point of sales. As part of our extended digital services, we will also be forging new collaborations with affiliated businesses. We’ve also developed an entire new technology stack as part of the shift to the new mobile application.”

adoption of the technology has enabled customers to take three pictures of their paperwork via their mobile phone, and the software platform does the rest, reading information with an 85% accuracy – which then simply needs checking for confirmation once the online fields are ready to view.

“The process takes away the need for the customer to type in numerous details, saving them time and stress,” Dolansky says.

Other ecosystem partners have been instrumental in developing the super app with its access to numerous products and services. At the moment, the majority of our

Customer centricity, data and KYC HCIN’s culture is one of innovation through strategy. As part of its developments, the company is seeking advice from its users in the journey towards better products and services. Dolansky believes fintech is as much about bringing the customer needs into sharper focus, as it is about delivering better services.

“We are talking to our customers. Our customers are part of every small piece of the development process. Their feedback on an idea, before the development process begins, is critical. Later on when we have a pilot product, we test it again and get their feedback on, for example, how the screen functions – is it user friendly and intuitive enough?”

Once the first official production begins, HCIN gathers feedback again. “Working with the customer is the biggest inspiration for innovation in fintech,” Dolansky states.

Ultimately, the goal is to bring better opportunities to people who have been shunned 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 nicer environment.

These are things that, prior to our services, were unattainable.”

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