BNP Paribas Personal Finance is committed to developing a Responsible Lending policy in every country in which the Group has a presence, with a vision that is both simple and demanding:
- Supporting households and economic growth by offering credit access to as many people as possible,
- Building sustainable products to combat the overspending that can lead to overindebtedness.
Middle class access to credit
For almost two years now, Cetelem has been meeting regularly with stakeholders in social life (consumer, family and charitable associations; social, political and governmental institutions, etc.) concerned with the issue of personal loans. These meetings help to conduct clear and transparent discussion, to confront sometimes contradictory viewpoints and to reflect together, with the aim of making changes to credit practices and offers.
With this in mind, Cetelem set up its Institutional Meetings in November 2010. The second edition of these Meetings in June 2011 was the opportunity to invite stakeholders to participate in conducting a study on the fundamental theme of access to credit.
How can access to credit be streamlined? How can access be opened up to populations for whom credit is limited? How can access be developed around themes and issues in line with current lifestyles?
In short, how can we meet the financial needs of the middle class of today?
Responsible Lending: definition
- “Accessible”: a product that offers a shrewd balance between the loan amount, the interest rate and the repayment period. In other words, offers should be competitive, but it is important to ensure that their terms and conditions do not generate monthly repayments that overstretch the household budget.
- “Easy to understand”: all the information needed to understand the product, and therefore make a responsible choice, is provided in clear and simple form.
- “Reassuring”: a complete range of insurance products to protect both people and the items financed is available to complement the Responsible Lending offering.
- “Flexible”: because it seeks to be a partner to its customers, the company is always willing to listen and look for solutions if the borrower is having difficulties: offering to postpone monthly payments, rescheduling a loan, increasing or decreasing monthly payments, etc.
- “Innovative”: supporting households as their lifestyle changes by developing product mechanisms that encourage sustainable and responsible spending.
CLEAR INFORMATION FROM THE OUTSET TO FULLY UNDERSTAND ALL THE ISSUES
BNP Paribas Personal Finance has created the first ever non-commercial credit information website: Mon Crédit Responsable.
The main purpose of this not-for-profit website is to provide consumers with the information and services they need to use loans safely and effectively.
In France, for example, when the new consumer credit regulations came into force in 2011, the moncreditresponsable.com website posted a series of educational videos to inform the public about the major changes expected.
The yearly magazine “Question de Responsabilité” supplements this information. Available on paper and in electronic format, it summarizes credit regulations and the main actions carried out by the company in response to these requirements. The publication is widely circulated internally, but also externally to customers, partners and stakeholders (consumer associations and charities).
ADAPTING CREDIT TO CHANGES IN SOCIETY
EMPLOYMENT, WITH THE LAUNCH OF LOANS FOR fixed-term EMPLOYEES
As part of its Responsible Lending policy, BNP Paribas Personal Finance in France has set itself the major task of improving access to credit while remaining particularly mindful of its responsibilities when it comes to granting loans, adhering to the maxim “more access, less excess”.
THE ENVIRONMENT, WITH THE LAUNCH OF “GREEN” PRODUCTS
Are private individuals given the right encouragement when it comes to responsible spending?
A survey conducted in 2011 by CREDOC – the center for behavioral analysis – observed a shift from good intentions to tangible actions with regard to the environment. What role should a credit organization play in these changes?
The BNP Paribas Personal Finance Group is developing products in several countries to meet these increasingly tangible changes.
AT THE TAIL-END OF THE PROCESS, MAINTAINING CUSTOMER RELATIONS
Managing unforeseen difficulties
Cetelem has implemented a system for detecting customers who could be in difficulty, using a preventative method before the first non-payment actually occurs. By observing very specific criteria, such as atypical use of revolving credit or loss of income, Cetelem writes to its customers, offering to make contact and take stock of the situation before their difficulties become more serious.
These customers are then supported by a dedicated team of about ten Customer Advisors who conduct an in-depth exploratory interview and identify details concerning the financial health of the customer’s household, which may have changed since last contact with Cetelem. If difficulties are revealed, the aim is to make the customer aware of more structural issues, such as expenditure over the budget available or poorly adapted monthly credit payments after a loss of income, and to convince them to take action.
If no solution (restructure current loan, activate insurance, postpone payments, etc.) can be found, the Advisor makes an appointment with the system’s partner association Cre¬sus for an overall follow-up of the customer’s financial situation and provision of budgetary support.
A GOOD PRACTICES CHARTER FOR DEBT COLLECTION
Around the world, BNP Paribas Personal Finance complies with a debt collection (from the first outstanding payment to contentious debt recovery) based on the information shared during regular discussions with consumer associations, to ensure that all employees involved in these functions follow a common set of rules. This work focuses primarily on expanding the range of solutions offered to customers and enhancing their relevance to each type of situation, as well as doing everything in our power to ensure that their circumstances return to normal on a sustainable basis and ensuring that employees behave respectfully.
SET-UP OF MEDIATION SERVICES IN A NUMBER OF COUNTRIES.
The set-up of mediation via an independent company, most notably in France in 2010, or even internal mediation, as is the case in Portugal, is geared towards further improving the quality of service offered to customers.
The objective is to:
- take customer relations to the next level by offering to call upon a third party to arbitrate and provide an opinion in the event of unresolved disputes,
- identify and implement improvements that will reduce the number of disputes, thanks to the mediator’s advice.
In France, the mediator’s first annual report made it possible to identify two types of dispute.
The first stems from a misunderstanding of some of the terms of loan offers or the way loans work. There is therefore a need to provide greater clarity when making an offer.
The second relates to appeals made subsequent to the loan granting decision and sometimes to the commercial relationship itself.