On September 28, a smallfinance forum was held in the capital. Throughout the day, financial experts discussed the work of companies issuing microloans, banking organizations and the actions of the regulator. At the end of the congress, the main points were highlighted: the requirements of the central bank are likely to be simplified, it is necessary to limit the number of loans issued in one hand, and it is also desirable to gradually raise the microfinance image in the country.
Supervision must be consistent with what is happening in the microloan market
The representative of the Central Bank, holding a senior position in the main department of the microloan market, Ilya Kochetkov, said how the supervision of microfinance organizations should be improved.
Appropriate for MFLs regulation
When developing a new law for MFLs, it is necessary to clearly understand that these companies are clearly different from banks. Accordingly, claims that have a positive effect on the banking market may be unacceptable for organizations issuing microloans.
Within the market, it is also necessary to distinguish between the opportunities and risks of different companies and, accordingly, to resort to different methods of supervision. According to the speaker at the moment, the main part of the microloan market is occupied by those companies that should be regulated more gently.
The seriousness and intensity of observations for each individual company must also be different. The main inspectorate of the Bank of Russia is already working on this idea, then it is planned to connect other units of the regulator. The most frequent discussion is the situation with the correct and timely reporting.
The reputation of the microloan market
To date, the media quite negatively describes the negative towards microloans. Most people who have not yet applied to the MFL never have the right idea about this type of lending. In fact, things in the market are not so bad. It is necessary to influence such a situation. Microfinance organizations need to more often share the experience of positive borrowers, who not only paid their loans on time, but also told how the company helped them by providing money at the right time.
Also, the improvement of the reputation of the market as a whole should be influenced by the tough measures of the Central Bank to black companies that conduct their business in bad faith. Every four months, applications are sent to law enforcement agencies for approximately 300 companies.
Microloans occupied a tight place in the financial sector
Within the Bank of Russia, MFLs have become an officially significant lending instrument, which is already good. Initially, there was ill fame about microloans, many said that the country absolutely did not need such a market. At the moment it is considered correct, it refers to this type of lending, at least from a professional point of view.
The head office of microfinance has already received certain approvals for the modification of microfinance organizations. So far this moment has only an initial character, but there are already some agreements on changes in legislation that will affect the ability of banking organizations to transform themselves into IFIs and vice versa.
MFL Standard Criteria
Another representative of CentroBank, Alexey Chirkov, once again confirmed the information that companies should independently offer regulatory tools that can be transformed into standards in the future. And, of course, he outlined several areas that, according to the Central Bank, should be in them.
Requirements for size and information detection tools
The criteria should not be exclusively formal, they should be developed in practice. It should be explicitly stated how the information is obtained and how open it is for the consumer. It is not necessary to indicate modified information or use terms that are incomprehensible to most consumers.
Mandatory requirements for employees
For the most part, such rules should apply to employees who have direct contact with customers. It is necessary to think over and activate the minimum requirements for candidates wishing to enter a job in an MFL. It is important to understand that this is not about a large list of criteria for the selection of candidates, which will add to the burden on the administrative department of the company. The point is to exclude the moments when the employee, who communicates directly with the client, has one or several convictions.
Greater communication with borrowers before litigation
Communication with consumers is an important moment in the work of any company. The same goes for the MFL. There should be clear criteria that clearly describe the interaction with customers, for example, specific scenarios for receiving requests. The main idea of such actions is increasing loyalty and consumer confidence in microfinance.
On January 1, a law enters into force obliging all MFLs to respond to customer inquiries about a current loan delinquency. On another matter, the right to ignore applications remains, but one should not forget that without receiving proper information from the company, the client can contact the Central Bank. This is inconvenient for the consumer, and the organization will earn a certain negative.
It is necessary to reduce the possibility of social risks.
Such an action must be done for those credit products for which the risk is higher. For example, “payday loan” this product should be issued once to one person per year. And besides this, determine the maximum number of extensions on it.
At the moment there are very small loans up to 500 rubles, which does not make sense to limit anything . But loans in the amount of 10,000 to 20,000 rubles remain products of increased social risk and must be issued in a specific, predetermined amount.
Microloans need new technologies
Among the companies, the most interesting forum track was dedicated to new technologies. And it does not seem strange, today, in order to withstand the competition, it is necessary to follow the development of technologies and correctly implement them in their business processes.
The current leaders in the market for innovative technologies are trying to develop purely individual financial systems based on customer income, while not forgetting about various macro and micro values, which can be very much. In such an action, it is simply impossible to sort through all the indicators manually, and therefore the intervention of electronic algorithms is required.
In the west, there are still banks that use the usual methods of work, which continue to incur losses due to this. At several major US banking organizations, the cost of conducting operations for issuing one loan sometimes reaches 2%, and in rare cases grows another three times. The surplus profit of large European banks over the past year fell 12 – 25%. In addition to financial losses, there are difficulties associated with processing a large number of assets, employees and premises. Because of this, they are inferior in flexibility to banks that innovate in their business processes.
Venture investor Alexey Chalenko strongly suggested that companies issuing microloans to change established methods of work, apply innovations, and many who, for whatever reason, have not yet begun to do so, issue microloans online.
Microloans of the future
First of all, a competitively capable MFL should provide its client with the maximum comfort and convenience in using all the company’s products and services available to it. Of course, this also applies to the speed of the service. A convenient microloan in the future should be a clear application in the consumer’s smartphone. If the user has several applications on the screen, it will be much easier and faster for him to compare the offers and select the appropriate situation.
An equally important object of improvement for MFLs is the loan approval system and the assessment of a potential borrower. It should already work many times faster today, using the latest technology. Not so long ago there were about twenty criteria for customer evaluation, now this number can reach 10 thousand.
Modernization of the system will be useful, as well as the client, and the company itself. Reduced processing time, labor costs and, accordingly, the cost of each inspection. The client receives funds even faster, and the organization reduces the risks associated with incorrect assessment of the borrower. In the future, in order to keep up with competitors, each MFL will find it useful to use innovative Big Data and Data Maining systems.