Alternative Lending – Important things to remember

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If we can keep the demonetization debate aside for some time (big assumption that we can!), money does not really have any colour, and this is even truer for the customers of Fintech players – borrowers could care no less whether they got their loan from an MNC Bank or from a regional microfinance company. Yes, for sure, the borrower would refer the microfinance company to all his acquaintances who are in need of money, if he has been treated better there than at the MNC Bank. The advantage that accrues to organizations who have been able to make their customers happy is known to all.

What may not have been so well understood by many alternative lending fintech startups is what an unhappy customer can do in today’s networked environment. They will take to social media in a jiffy, telling all their friends and contacts how shabbily they have been treated – remember these customers who are using online services are likely to be more active on social media. Their tweets and chats will very soon push the customer-unfriendly company into a deeply “unliked” territory.

So, what should a Fintech company do to ensure that they are liked by their customers and ensure that the flock of happy customers grows bigger and bigger by the referrals from the satisfied ones? Very simplistically, commit to do what the customer’s justifiable expectation would be, and do at least what has been committed. Remember that people have little tolerance for poor service; and if it gets tested once too often, they will simply take their business elsewhere.

In the context of alternative lenders like Qbera – Fintech Startup based in Bangalore, it is critical that the customer is extended a helping hand at each stage of the online application process. How could we do this?  

a) Tell him why you are asking for a particular document or a piece of information

b) Clearly let him be aware that his application could be rejected even after he has completed the application process

c) Help him with online validations so that the data entry is free from unintended errors

d) Call him in case his digital journey tells us that he has fallen off because of a hurdle that he may have faced

e) Be transparent about the interest rate, fees and charges

f) Give him the confidence that the personal data that he is sharing is secure.

Most of the customer complaints are around mis-selling. The Terms and Conditions on the Website (e.g. qbera.com) should be unambiguous about the rights and obligations of the Customer. All communication that is sent to the Customer (Call/SMS/email) need to be clear and unambiguous. There is no point in throwing in that Insurance Policy that the Customer has never asked for, or quoting a flat rate of 7% per annum, where the actual rate of interest is 20% per annum! Convey very clearly the consequences of falling behind on payments – the impact on his Credit history, the high Penal Interest that he would have to pay, the extra amounts that would be payable in case the loan gets prepaid, etc.

Unfortunately, not everything in the Loan Application process can be done online; so, there will arise the need to meet the customer (hopefully, not more than once). If an appointment is fixed up at a certain time, the field executive – remember that he might be the only face of the alternative lender that the customer will ever see – has to be dot on time and carry himself as a true ambassador of a start-up which is dreaming of making it big.

And yes, a Fintech company is expected to be well aware of effective mechanisms of electronic communication. However, the flip side is the risk of over communication and unnecessary marketing push. Customers get tired of these! As it is, there must be so much happening in his WhatsApp groups, Facebook Account and office-email traffic – let us not burden him with email loads that he will soon start to dread.

So, an alternative lender can get it spectacularly right, or lose the opportunity by miles! The age-old advice of putting oneself in the Customer’s shoes holds good even today. How would I like to be treated if I was a borrower? Is the journey seamless, at every stage, on every screen? Have I been informed of what I am getting and at what price? Could I have got the colorless money from another lender more easily?…..well, it’s time that we get back to the debate on demonetization!

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