Home Credit recently released its Sustainability Report detailing the company’s progress in integrating and delivering on its Environmental, Social and Governance (ESG) efforts across all its operations around the world.
The report follows a framework that measures a company or business’ sustainable and ethical impacts. It is also aligned with the United Nations’ Sustainable Development Goals.
“This sustainability report marks an important milestone in our journey as a responsible, inclusive business that has ESG principles firmly embedded in its values and DNA,” said Jean-Pascal Duvieusart, chief executive officer of the Home Credit Group.
Home Credit supported customers and communities in 2021 as they navigated the continued challenging global environment.
Key 2021 report highlights at a glance
The report highlights key themes and trends that impact the business based on a materiality assessment.
- Serving the underserved: 23 percent of Home Credit customers were first-time borrowers
- Financial literacy: 109 million people benefited from Home Credit financial literacy initiatives in 2021
- Equitable lending: 43 percent of Home Credit customers are women
- Zero interest: 44 percent of Home Credit consumer loans have 0 percent interest, thanks to partnerships with retailers and manufacturers
- Payment holidays: 2.2 million customers were given the option of payment holidays and deferred payments to help them better cope with the pandemic in 2021
- Giving back to communities: US$1.3 million dedicated to community direct aid in one of more than 50 projects across markets
- Carbon footprint: 12kt CO2 equivalent in scope 1 and 2
- Circular economy: 4.5k phased-out office devices refurbished and resold or donated
The materiality assessment sets out the most significant themes for Home Credit. It was compiled with reference to industry-leading benchmarks such as the Standards and Practices for Responsible Inclusive Finance by the Social Performance Task Force (SPTF), Principles for Responsible Banking by the United Nations Environment Programme Finance Initiative (UNEPFI) and Materiality Finder by the Sustainable Accounting Standards Board (SASB).
In addition, the Home Credit Sustainability Report was prepared with reference to the Global Reporting Initiative (GRI) Standards.
Spotlight on the Philippines
In the Philippines, Home Credit has been the pioneer of financial inclusion since 2013, providing access to useful, affordable and responsible financial products and services to more than 8 million Filipinos.
“Our mission at Home Credit is to empower every Filipino to be financially capable. Our robust network of more than 10,000 POS locations and expanding online presence present us whenever and wherever our customers need us. With our strong brand partnerships and community across the country, we have become a one-stop ally for every Filipino,” said David Minol, Home Credit Philippines chief executive officer. “We have provided more than Php178 billion in loans to our customers over the past eight years. Those loans have become a lifeline for most Filipinos, especially those without access to bank or credit.”
Home Credit Philippines has been at the forefront of financial inclusion and innovation. Its Home Credit Marketplace app has evolved into a vibrant hub where customers can browse products, compare prices and buy from local retailers. As part of its efforts to further provide options for customers, the company has also expanded its partnerships from major retailers to specialists and medium to small brick and mortar stores, the majority of which are based in smaller, underserved cities. By the end of 2021, its marketplace features products from more than 70 merchants across the Philippines, expanding the availability of products from consumer electronics and gadgets to furniture, home appliance and even sports and lifestyle equipment.
At the height of the pandemic, HCPH also partnered with BPI/MS Insurance Corporation, one of the Philippines’ major insurance providers, to address the growing demand for insurance services in the country and provide value-added services to Home Credit’s customers to help them become more financially resilient despite the uncertainties.
Building on the learnings from the pandemic, Home Credit has also created its enhanced Safe Lender Toolkit, which aims to help customers resolve unexpected financial difficulties. The toolkit provides a range of support options from short-term through deferred payments and collection exclusion to long-term with debt resolution support, dynamic repayments and settlements.
“Financial inclusion has always been at the heart of our business approach. Affordability assessment sits at the core of this approach. We understand the importance of not overdebting customers and working with them to ensure the right product fit for their particular circumstances,” said Zdenek Jankovsky, Home Credit Philippines’ director and treasurer. “Taking this approach allows our customers to build a more financially resilient future despite rising global uncertainties,” he added.
ESG principles have long driven Home Credit’s portfolio development, whether it’s a 0 percent interest product that helps someone buy their first smartphone, a revolving loan that provides a more resilient cash flow or a payment holiday that helps a customer whose financial circumstances have suddenly changed.
Linked to this solid ESG performance are ESG-linked loans that have been granted to Home Credit Philippines to further its mission.
In December 2021, HCPH closed its first ESG-linked credit facility with Deutsche Bank, which was noted as a groundbreaking transaction with focus on expanding credit access to underserved communities in the Philippines, including female and first-time borrowers, and increased provision of financial literacy programs in the country.
As of June 20, Home Credit Philippines, in partnership with Praxis and the Manila Broadcasting Corporation, has launched a financial literacy radio segment named “Payo Para sa Life: Pera Wais Tips” aired daily across DZRH radio stations nationwide to expand HCPH’s flagship “Wais sa Home” financial literacy program.
In May 2022, HCPH and Citi pioneered a Php420 million social finance facility with a first-of-its-kind support for mobile device purchases for Filipinos. Half of the loan is devoted for women to aid them in their purchases of basic digital devices as a way to empower them to connect to the internet and access essential services such as digital banking and financial literacy, and to assist them in running their own online businesses or availing online education.
“With more ESG-linked loans, we’re even better placed to continue to deliver equitable and transparent access to financial services for our communities,” said Jean Lafontaine, Home Credit Group head of funding and investor relations.