'Party loan company' employs innovative strategies for growth
SPRINT Financial Services, popular for offering loans to attend parties, has incorporated more unique strategies as it seeks to grow its brand in the competitive lending market.
The company made headlines two years ago when it began offering loans to partygoers who found it difficult to pay up front the cost for tickets, transportation and board to attend high-end parties on Jamaica's west end.
That product was one of a range of personal loans offered by Sprint at the time, but the company has since then expanded into providing micro business loans, with a particular aim at the informal sector.
According to Christopher Barrett, founder and CEO of Sprint, the informal sector now represents 70 per cent of the company's $15 million loan portfolio.
"I am now lending to the common man, the disenfranchised folks -- the man with the cook shop on the side of the road or with a little bar — who can't go to (commercial banks) and get a loan," Barrett told Sunday Finance. "There are a few companies that dabble in lending them money but none of them, from my research, has put in as much in their portfolio as I do."
They can get loans from $10,000 to $250,000 with a "competitive" interest rate, according to Barrett, who wished not to publicly disclose rates as it runs counter to industry practice.
Sprint is currently involved in a loan drive project in inner-city communities, where it has been handing out 35 to 40 loans a week to micro-businesses. The company will be visiting Tivoli and communities in Central Kingston over the next few weeks, Barrett said.
The loans are secured using appliances as collateral, but Barrett said that oftenthe appliances are valued below the amount of the loan. He is not daunted by any possible negative impact the relatively relaxed approach could have on the company's loan book.
"The cook shop guy is actually more likely to pay on time than many folks who 'have the money', and is always taking another loan out," Barrett said.
"The bottom line is that, in terms of the pride of the average persons out there, they don't want their neighbours to see their appliances being taken out of their homes for not repaying loans," he said.
Borrowers repay weekly.
"Payback is weekly because they usually sell goods on weekends, so come Monday they have the money to pay back," said Barrett, who was the co-founder of Global Courier Services, the second largest provider of online shopping services before it was bought by its competitor, MailPac.
Sprint is also now positioned in three parishes, having expanded its footprint inexpensively through the establishment of satellite offices in Mandeville, Manchester, and Portmore and Spanish Town in St Catherine. The company has agents in each area, conducting interviews with prospective clients and sending back information electronically to the headquarters in Kingston, where the application is reviewed for approval.
"Our method of how we plan to grow is most unique than any other (financial services) company in Jamaica, the majority of which expand across the country via brick and mortar," Barrett said. "The plan by 2014 is to be in a further three parishes, including possibly Montego Bay, St James and Ocho Rios, St Ann".
Additionally, Sprint will in about 30 days release an iPhone and Blackberry app, which will allow borrowers to track their loans via their phones and receive notifications. What's more is that the company plans to launch a promotion, at the end of March, in which it will lend five clients $200,000 at no interest.
"What that is essentially for is brand awareness," Barrett said.
"In my opinion I think we are revolutionising the lending business."