Mentality of borrowers affects lending business
Adjustment and continuous improvements of the business workflow and underwriting algorithms with a focus on the mentality of customers enable efficiency and expansion of the alternative lending business, proves the example of the European P2P platform Robo.cash and the affiliated loan originators which are united in an international financial group.
Over 26 million euro loans were financed through the European P2P platform Robo.cash in eight months in 2018 that is 223% more than in the same period a year earlier. Operating according to the ‘peer-to-portfolio’ model, the platform brings together private investors and legal entities with the loan originators in Kazakhstan and Spain. This dynamic is believed to be facilitated by continuous development of the IT system and robotic scoring algorithms applied by the lending companies. Despite a fixed standard of the financial products, the example of Kazakhstan and Spain reveals that the borrower's profile is inevitably considered at any stage of the improvement process due to its impact on the business.
According to the statistics, both markets are characterized by a prevailing number of men among borrowers: 55% in Kazakhstan and 59% in Spain. However, there is a distinctive difference in the average age of customers: 33 years with a major share of borrowers in the age of 18-30 in Kazakhstan (18-24 — 25.2%; 25-34 — 38.8%) and 38 years with a prevailing number in the group of 35-50 in Spain (35-40 — 21.3%; 41-50 — 23.1%). Despite the highly competitive landscape in these countries, customers tend to stay loyal to the services they appreciated. Within the whole financial group, Kazakhstan has the greatest share of clients who took more than one loan — 88.7% and Spain has 77.2% of repeated clients.
“When we just started working in Kazakhstan, customers were mainly represented by middle-aged and older women, the share of youth was small. Later, we found the reason: young men considered borrowing from third parties as a shameful thing meaning that relatives and friends refused in support. With regard to the Spanish borrowers, there is a habit to procrastinate which undermines the repayment discipline. There were some cases when people asked the support team whether they had borrowed a loan from us. As a matter of fact, they simply forgot which service they used but it also serves as an evidence that the Spanish borrowers are concerned about their credit history and compare offers from various lenders,” — comments Sergey Sedov the Founder of Robo.cash on the mentality of borrowers.