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I went out shopping for an auto loan in October of this year and here is a little run-down. A thread.
Most banks-(even though the experience may be different from one branch to another)- did not seem too interested to entertain me. Of course, this does not include Meezan and Dubai Islamic Bank who have comparatively prominent auto loan portfolios (more on that later)
MCB, ABL, NBP and UBL have auto loan products online-but apparently only in spirit. I told one bank rep I had an account with them, he said: "if you have an account, you would know, we are not very customer-centric". Maybe he meant "consumer" but neither can be considered wrong
Auto loans have picked up heavily over the last few months. I did a thread on that earlier here: https://twitter.com/SattarHuma/status/1321484255789223941?s=19
On prevailing kibor, the rate that banks ought to charge is ~11% (kibor+4% premium). But the rates quoted by most banks were 14-15% which was flummoxing
On prevailing kibor, the rate that banks ought to charge is ~11% (kibor+4% premium). But the rates quoted by most banks were 14-15% which was flummoxing
Both Meezan and Dubai Islamic have growing consumer finance portfolios with dedicated human resources for this segment. I found their reps pushing their products on me like a good used car salesman on a slow day, which is great!
In terms of lead time and flexibility in payments, both banks promised 5 working days for the approval of the loan and negotiable rates.
BUT, Meezan Bank required me to get two "male" references; it doesn't even matter whether they are employed or not, they just need to be male
BUT, Meezan Bank required me to get two "male" references; it doesn't even matter whether they are employed or not, they just need to be male
which ofcourse, is something that is both archaic and unnecessary. I suggested I will get four female references, as a joke, which was, alas, not very well-received. I also found that but Meezan bank does not like giving loans to professionals in the fields of law and media...
Now whether this is actually a bank policy or just something the rep mentioned, for dramatic reasons, is unclear. However, if it IS a policy, logic dictates, the said bank should not be using the media for its publicity and advertising; and lawyers for its legal needs...
I eventually decided to go with Dubai Islamic Bank given they accept female references. However, there were several documentation issues which were completely unavoidable but took 30 days+ to resolve. We are now going on 60 days, and I do not know the status of my application..
In fact, each time I place a call to them, we go back to some missing paper. How long can it possibly take to assess credit risk for a salaried individual? Now this is a one person's account, perhaps there are many who have had better experiences, but I venture that consumer...
banking is in disarray. At the risk of extrapolating my experience, and given this is a small auto loan we are talking about with an asset value of ~Rs 2.5m (35% equity), if the banking sector is serious about #finclusion, it needs to purposefully overhaul its credit delivery...
By making customer-facing services seamless, i.e.
a) ensuring pain-free documentation. Ideally the entire process should be digitized
b) ensuring there is transparency in pricing mechanism
c) cutting down on approval times!
d) eliminating silly rules that have no impact on risk
a) ensuring pain-free documentation. Ideally the entire process should be digitized
b) ensuring there is transparency in pricing mechanism
c) cutting down on approval times!
d) eliminating silly rules that have no impact on risk
The SBP with Reza Baqir at the helm is pushing financial inclusion, particularly for women, and specially in the housing sector- which given the tenor/ size of the loans would be even more unattainable for an average consumer. And while regulatory ease is important..
There can be no consumer finance without commitment to efficient and timely customer service and adequate resource support.
(end thread)
(end thread)
