Reducing risks is no longer enough to improve loan portfolio performance. To ensure portfolio profitability, a credit union should shift its focus toward the markets it is currently missing out on.
How can you identify these markets? Since all the changes that emerged out of the 2007-2008 financial crisis have made the lending environment more competitive than ever before, finding new paths to sustainable and profitable growth for loan portfolios can be difficult. But difficult doesn’t mean impossible.
Focusing on New Lending Market Segments
Over the last few years, credit unions have significantly increased their deposit and liquidity levels, while experiencing healthy loan growth and declining delinquency rates. This means that credit unions are finally able to “move away from long-term investments, as they increase lending to members,” said Rick Metsger, board chairman of the NCUA. As a result of the collective effort made to facilitate access to more affordable and responsible financial products, credit union lending has “continued to rise at a double-digit pace over the [past] year,” according to the same source.
Tapping into new lending market segments and looking for lucrative financing solutions continuously can help you increase the size of your credit union loan portfolio at a faster pace and secure future growth. When it comes to finding new investment opportunities, capitalizing on underserved markets like manufactured home financing is a sure-fire way to drive sustainable growth.
What’s more, partnering with a reliable and experienced manufactured home lender who provides turn-key access to a powerful consumer lending strategy, which has been proven to increase lending volumes and cut operating expenses, can help maximize the profitability of your credit union loan portfolio. As an example, by opting for our manufactured home loan programs, your credit union will be able to:
- Add a new category of high-yield, low-risk lending solutions that can diversify loan portfolios, while building a competitive advantage through a solid lending partnership;
- Offer its members more affordable financing options compared to traditional mortgages from a trustworthy source; this will promote member loyalty;
- Expand its customer base by gaining access to thousands of potential manufactured home buyers and increase its opportunities for cross-selling;
- Benefit from comprehensive applicant screening, loan processing, underwriting and portfolio performance management services;
- Gain access to the unparalleled expertise of a reliable lender specializing in every facet of the manufactured home lending industry.
Achieving Competitive Advantage
Although credit unions are originating more loans than they did in the past, there is one important aspect we need to address: market share. Why is market share important? When evaluating a credit union, market share is a solid indicator of its competitive edge and long-term sustainability. If a certain lending market segment is growing, but all the lenders in that particular segment maintain their market share, then consumers probably don’t realize the benefits credit unions offer.
Nowadays, many different factors can impact a credit union loan portfolio. But if you take the time to look for “gaps” to fill, you’ll always find new, effective ways to increase your portfolio options. To take the advantage of the current manufactured housing income stream, we invite you to get in touch with our experts today. The manufactured home lending programs we provide at Triad Financial Services have proven to increase credit unions’ penetration into the secondary market for manufactured home loans. With our lending solutions, your credit union won’t only enter the manufactured home lending market; it will also fulfill its commitment by making available more affordable lending options for hard-working Americans.