Covid 19
Turn the Odds in Your Favor
The Uniqueness of the Lending Industry
Under the Influence of the Covid 19 and the economic recession, all industries are being suffered due to the macro environment that no one could escape from it. The incline of the unemployed rate, the stagnant atmosphere of the market and the closure of business are very common in each industry now. However, there is a completely different circumstance in the lending industry. Although the lending industry also affected by the economic environment, experts suggest that the industry would be resume normal quickly along with the mitigation of the Covid-19. They believe that the business of the lending industry won’t be influenced dramatically by the economical environment. As a professional lender, it is time for us to get well-prepared for the future in advance during the time and provide enhanced services once the market resume to normal.
Challenges and Opportunities
Once we acknowledge what are the challenges that lenders have to face, we may also discover the opportunities that we could take. Lenderse sums up some challenges and opportunities here as a list, so you could amend or think of some business strategies specifically addressing these obstacles and take the opportunities.
#1 The Upsurge Trend of No-Show Lending
Many of us have experienced the life of quarantine to avoid the infection of Covid 19. Even if the lockdown is over, our daily life has shifted slightly in limiting the outdoor activities too, that we no longer hang out with friends, work from home rather than in the office and even borrow money at home. Nowadays, our customers would prefer to borrow money through the Internet or phone rather than in person. If lenders could provide responsive technologies to support these services, the number of loan applications would be unchanged like previous months so that we could decrease the influence brought by the pandemic.
#2 ‘Be Considerable’ as a Business Strategy
Don’t ignore that little tiny thing you could do because it may change the whole image. No doubt that the customers borrow money because they need a helping hand in the financial aspect in order to solve their problems. We should try our best to suggest a lending proposal which would be a win-win situation for both of us. For example, we could provide some special conditions in the lending agreement, such as providing interest-only period and extending for repayment schedule. This would alleviate their burden of repayment during the hardship and establish a sustainable client relationship with your clients.
#3 The Emerging Virtual Bank
Banks are always the largest competitors of the lenders since they also provide various loan products for their customers. The emerge of virtual banks indicates that there will be the new competitor within the lending market. To confront the challenges brought by virtual banks, lots of lenders invest on technology and develop their FinTech department in order to remain their competitiveness within the market.
#4 The Saturated Market
The lending market nowadays is getting more and more saturated with the surging numbers of legitimated lenders. Most lending companies invest more in their business and develop more loan products to attract customers. However, it is suggested that acquirement is also one of the strategery to expand the market share. If you would like to know more about expending business by acquirement in the lending market, click here and visit our client’s success story.
Tips for Lenders
As an insider of the lending market, Lenderse would also like to advise two tips for your reference in order to assist you in business.
#1 Bad Debt Monitoring
To enhance business performance, there are two fundamental directions for doing so which are increasing the profit and prevent loss. Most of the companies would focus on expanding the business by investing more to increase the profit. However, the prevention of loss also worth us to be aware of. By monitoring the bad debt, we could acknowledge how much cashflow do we have and forecast the business performance.
#2 Approve or Not? That’s the Question!
Aforementioned, it is important for us the prevent loss in this difficult time. We could start working on this from examining the applicant, enhancing out risk management to avoid the fraud and scam. Multi-layers of applicant analysis in terms of credibility should be carried out before approval. Connecting with third parties like TranUnions and Anti-Money Laundering would help too!
With the nature of lending industry, it is sure that the market will be resumed to normal within a very short period of time since the situation of Covid-19 is getting much better now. All lenders should take the remaining time to prepare in advance and keep our fingers crossed!
By Lenderse Research and Editorial Team