In any kind of business, recurrent customers are always a good sign. When customers return for more, it’s probably because you’re doing something right as a business. On the other hand, if no customers return, you’re probably on the wrong path and should re-evaluate what you’re doing.
My ol’ grandma
I remember my grandma’s old TV, bought in the end of the 1980s (according to her, that is – the preciseness of her memory does seem a bit fluctuating). The old monstrosity weighed a ton, but seemed quite unbreakable and worked without problems for a few decades. So it was obvious for her, when replacing it with a ridiculously-oversized flat screen TV a few years back, to buy one of the same brand – she was not in doubt about that consideration for one second. This is a clear example that if you sell a good product, people come back. Whether it’s a cup of coffee, a TV or a loan product.
So I wondered how many MYC4 borrowers actually return for more than one loan. Here are the figures:
- 2 loans: 649 borrowers
- 3 loans: 158 borrowers
- 4 loans or more: 37 borrowers
The number of borrowers with more than one loan thus amounts to 9.5 % of the total borrowers (844/8,887 borrowers as of September 2012). This figure might seem low to some, and of course we hope to improve this over time, but for MYC4’s relative short existence, I think it’s quite satisfactory. What’s interesting is to see how this percentage will evolve over the next couple of years.
Going for the record
One of such repeat borrowers on MYC4 is Jacinta Njeri Gatiba in Kenya, currently repaying her fourth loan – way to go!
So remember: Every time you see a loan open for bidding, and that little ‘Other loans’ tab shows you that the borrower has already repaid another loan, move ’em up a little on your priority list – they’re the true ‘core customers’. And more importantly, they have already shown their worth. Credit history is essential in this sector.
Note on data: Cancelled/non-funded loans are deliberately not included in the statistic, only successfully funded and disbursed loans – cancelled loans therefore don’t distort the conclusion. Please also keep in mind, that the division between businesses and loans was not implemented in the MYC4-system until mid-2009, which means that loans disbursed prior to this date, could not be registered in the system as repeat borrowers, thus most likely underestimating the relative number of repeat borrowers.