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Model of Optimizing Correspondence Risk-Return Marketing for Short-Term Lending

Author

Listed:
  • Andrii Kaminskyi

    (Department of Economic Cybernetics, Taras Shevchenko National University of Kyiv, 01033 Kyiv, Ukraine)

  • Maryna Nehrey

    (Department of Economic Cybernetics, National University of Life and Environmental Sciences of Ukraine, 03041 Kyiv, Ukraine)

  • Vitalina Babenko

    (Department of Banking Business and Financial Technologies of Educational and Scientific Institute “Karazin Banking Institute”, V. N. Karazin Kharkiv National University, 61022 Kharkiv, Ukraine)

  • Grzegorz Zimon

    (Department of Finance, Banking, and Accountancy, Faculty of Management, Rzeszow University of Technology, 35-959 Rzeszow, Poland)

Abstract

The modern credit market is actively changing under the influence of digitalization processes. Some of the drivers of these changes are financial companies that carry out, among other things, online lending. Online lending is objectively focused on short-term small loans, both payday loans (PDL) and short-term loans for SMEs. In our research, we applied a special segmentation of borrowers based on the whale-curve approach. Such segmentation leads to four segments of borrowers (A, B, C, and D) which are characterized by the specific features of profitability, risk, recurrent loan granting, and others. The model of optimal correspondence between “risk–return-marketing efforts” is elaborated in the mentioned segments. Marketing efforts are considered in the context of the optimization of the marketing-budget allocation. Our approach was essentially grounded in special scoring-tools that allow multi-layer assessment. A scheme of assessment of profitability, risk, and marketing-resources allocation for borrower’s inflow is constructed. The results can be applied to the customer relationship management (CRM) of online non-banking lenders.

Suggested Citation

  • Andrii Kaminskyi & Maryna Nehrey & Vitalina Babenko & Grzegorz Zimon, 2022. "Model of Optimizing Correspondence Risk-Return Marketing for Short-Term Lending," JRFM, MDPI, vol. 15(12), pages 1-13, December.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:12:p:583-:d:995314
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    References listed on IDEAS

    as
    1. d'Avernas, Adrien & Vandeweyer, Quentin & Darracq Pariès, Matthieu, 2020. "The growth of non-bank finance and new monetary policy tools," Research Bulletin, European Central Bank, vol. 69.
    2. Valya Vasileva, 2019. "Development Of Consumer Lending By Non- Bank Credit Companies In Bulgaria," Economic Archive, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 1 Year 20, pages 65-76.
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