How to differentiate your loans in a crowded market

Interestingly, as much as we say that Africa doesn’t have enough credit, sometimes it looks as though the market is oversaturated with too many lenders. The various app stores tell a story of an abundance of loan apps. Ultimately, it’s not merely about starting a loan business and being “one of the many lenders.” How does your loan business stand out in the crowd and rise above the noise? 

The answer is simple. Look at those big players who’ve done it right and are currently killing it in the industry.

Whether you’re a new lender or years in the game, we’ve carefully curated 8 ways to help you differentiate your loan business amongst others.

Channels

While most lenders focus on creating Mobile apps for their target customers, certain demographics are ignored. This means, many prospective customers are compelled to look elsewhere for loans. For instance, having a Web app would serve customers who cannot download Mobile apps for one reason or another. USSD is another overlooked channel that can cater to customers without smartphone access. So, to truly shine in a crowded market, consider different channels, especially channels that make sure your loan services reach everyone, not just the tech-savvy.

Customer experience

How easy is onboarding when customers download your app? Are there too many mental gymnastics involved in navigating the loan application process? These determine if customers find the app experience worthwhile and worth a second attempt. Ensuring that borrowers can quickly understand your app’s capabilities and benefits increases its overall attractiveness. On top of that, integrating interactive elements and user-friendly tutorials can help smoothen the onboarding process, boosting the likelihood of people sticking around. See how you can further differentiate your loan business through customer experience.

Quality of customer service

Customer service quality is one of the most significant predictors of success in any business, so you must pay extra care and attention to its quality. Prompt responses to questions and prompt resolution of queries are ways of ensuring consistent quality customer service. Remember that happy customers make repeat customers, and building long-term connections with your clients can lead to excellent word-of-mouth marketing. 

Process automation

Is your loan business still stuck in the stone age with too many manual processes? Do your borrowers have to fill out paper forms or send emails to apply or process a loan? If the right technology automates your process, you will provide the most outstanding services to your borrowers and minimize processing time and errors. Choosing the right loan management software to automate your process will improve your business’ scalability, allowing you to manage an increasing number of loan applications effortlessly. Are you wondering where to get the right technology to automate your process? Start here.

Offer excellent interest rate

Don’t try to make all your profit from one borrower in one go by offering a super high interest rate. Your chances of being labeled a greedy grifter and not being a popular choice increase. Instead, try giving reasonable, open interest rates consistent with market standards to build trust and attract a larger customer base. Additionally, offering various repayment choices and clearly communicating terms and conditions will help you build a reputation as a customer-friendly digital lender. Learn more about interest rates.

Flexibility

Another way to stay different is to offer flexibility to your customers. Tailor loan offers, terms, and tenors according to their needs. That way, you become a favorite household name among your target market. Consider introducing personalized interest rates based on customer profiles, making the borrowing experience even more individualized and providing a transparent and straightforward application process coupled with quick approvals. It adds another layer of appeal to your services, making borrowers feel valued and appreciated.

Ethical lending

Don‘t abuse your borrowers’ trust by playing with their details. Most importantly, never use unethical means to retrieve default payments. Always prioritize transparency in your dealings and keep customers informed of any changes or terms. Maintain open communication lines to handle problems quickly and build a trusted relationship. Finally, protect borrowers’ data with robust security methods, ensuring their privacy is a top priority. Remember that a customer’s right to data privacy is non-negotiable.

Show gratitude and request referrals

Customer reviews are a solid way to broaden your audience reach and differentiate your loans. After a successful loan transaction and repayment, don’t forget to appreciate them for the patronage and the promptness with which they paid back loans. You can also ask them to fill out a survey and then throw in an appeal saying, “Please spread the word about us.” Consider offering exclusive discounts or loyalty rewards to customers who share their positive experiences, encouraging them to become enthusiastic advocates for your loan business.

Don’t be a wallflower in the loan industry. Stand out

We’d like to reiterate once more that making your loan business stand out boils down to practical steps. Explore different channels to reach a wider audience, focus on making your customer experience hassle-free, and deliver reliable customer service. Automation can simplify your processes while fair interest rates and flexibility cater to borrowers’ needs. Ethical practices, privacy, and showing gratitude through customer appreciation all contribute to setting your business apart. 

Send us a message at [email protected], and let’s guide you in differentiating your loans in a crowded ecosystem.