Updates12 March 20203 minute read

Chief Risk Officer: Q&A with Simon Cordell

Plenti's Chief Risk Officer talks about credit risk management and how we are preparing for the possible impacts of COVID-19.

man raising hand to ask a question in a meeting
  • Personal loans: most of our personal loans are to borrowers looking to save interest on existing debt or to add value to their homes through renovation
  • Renewable energy finance: an increasing proportion of our lending is to borrowers, almost always homeowners, to finance the purchase of renewable energy products such as solar panels and batteries. By installing these products, borrowers will typically reduce their household energy bills
  • Car loans: we fund borrowers to buy new and used vehicles. Depending on the age and value of the car, we may take security to provide additional protection
  • The overall performance of a credit portfolio reflects the quality of its borrowers. Accordingly, I take confidence in the high average credit score, income level and homeownership concentration of Plenti's borrowers
  • Borrowers tend to show rational behaviours, in that many choose to pay their debts down faster in times of doubt. Plenti makes this simple for its borrowers to do, given we do not charge early repayment or exit fees on our loans
  • When creditworthy borrowers experience economic difficulty, it tends to be short-lived, temporary hardship, as a downturn typically doesn’t affect a borrower’s fundamental character and willingness to repay. Most people we lend to want to meet their financial obligations and so by working with our borrowers and offering flexibility in difficult times, we can help them restore their financial health and resume their contractual loan repayments. Our Provision Fund gives us the ability to offer this flexibility without affecting retail investors.
  • Product design: Our loans designed to be competitive and offer good value to high-quality borrowers
  • Acquisition: We seek to lend to borrowers who are looking for a better value offering, not those that can’t obtain a loan from their bank. Additionally, we seek to attract only those loan applicants where we believe there is a suitable willingness and capability to repay a loan
  • Applicant credit underwriting: We apply stringent credit criteria when assessing a loan application. We leverage both applicant information and third party data to assess the risk of a borrower defaulting on their loan and the resultant loss that may occur, to determine how much credit we should extend and what price we should charge (i.e. what amount the borrower should pay into the Provision Fund to cover the expected loss)
  • Repayment performance: We monitor the payment performance of borrowers, identifying if they ever need assistance to help ensure they can fully repay their loan, and ensure it is a priority

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Written bySimon Cordell
Simon joined Plenti in April 2016, having headed up Consumer Risk and Small Business Risk at American Express. His team considers all aspects of the credit lifecycle.