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Q1

Could you explain AIFUL's strategy in the consumer finance business?

Q2

Can you explain the credit guarantee business?



Q1

Could you explain AIFUL's strategy in the consumer finance business?

A1

In the consumer finance industry, the number of new contracts at major players remained stable, and the operating loan balance increased moderately. On the other hand, interest repayment claims, industry’s biggest risk, still require close monitoring even though they have declined significantly from their peak and the downward trend became more apparent in current fiscal year.

In this environment, while dealing with interest repayment claims as the principal management issue, the AIFUL Group is united in its efforts to increase the number of new contracts and the operating loan balance to bolster its revenue base. The Group is also working to diversify funding channels to strengthen its financial base and improve business efficiency across the Group.

In the second quarter of fiscal year ending March 31, 2018, the number of new contracts increased by 0.8% to 94 thousands. Also, AIFUL parent’s operating loan outstanding (managed asset based) increased by 10.5% on year-on-year basis to 338.4 billion yen. Going forward, the consumer finance business will continue to play a central role in the AIFUL Group.

Q2

Can you explain the credit guarantee business?

A2

In the credit guarantee business, the partner financial institution sells loan products to customers and also functions as the point of contact for these customers, and consumer finance companies provide services to the partner ranging from credit screening to loan guarantee. For consumer finance companies, this business enable to effectively utilize the credit scoring expertise that they possess without using their own funds.

The AIFUL Group provides the guarantee service of unsecured personal loans and products to guarantee business loans, and works to expand the outstanding sum assured by proposing new products and providing marketing promotion support to existing partners, taking advantage of its credit knowhow and "flexibility and speed," the strengths of the Company as an independent consumer finance company.

As a result, in the second quarter of fiscal year ending March 31, 2018, credit guarantee outstanding (managed asset based) was increased by 11.4% on year-on-year basis to 81.8 billion yen.