France’s Societe Generale banking group has opened a consumer credit unit here emphasizing quick and easy loans to consumers
France’s Societe Generale banking group has opened a consumer credit unit here called ProstoFinance, emphasizing quick and easy loans to consumers. Officials at ProstoFinance, the only credit institution in Ukraine that is not a bank, say this gives them an edge on the market.
The French group first established its subsidiary as ProstoCredit in August 2005 and then decided to rename it last month to avoid confusion with Privatbank’s ProstoCredit subsidiary.
For the last five months, ProstoFinance has been operating in test mode. It received a license from the State Committee for the Regulation of Financial Markets in the fall, and issued its first loan in December.
“We managed to register ProstoFinance as a non-banking financial entity, which gives us more freedom and opportunities to avoid different forms of licensing and thus simplify crediting and concentrate on consumer needs,” said Dymytr Krysanov, deputy director of ProstoFinance.
ProstoFinance provides consumer loans ranging from Hr 250 ($50) to Hr 30,000 ($6,000) for between three and twelve months at an annual interest rate of 12 percent, plus a 2 percent monthly commission. ProstoFinance acknowledges that its loans aren’t the cheapest in Ukraine, but emphasizes how fast and easy it is to apply for them. Borrowers can take out loans directly from any ProstoFinance outlet.
Already in stores
The money-lending firm has already established partnerships with chains of appliance supermarkets such as Foxtrot and Technomarket in order for consumers to receive credit at points where they are about to make purchases. The application process takes as little as 10 minutes, ProstoFinance says, thanks to a scoring system installed at the Kyiv office of the credit unit, which takes only seconds to evaluate the lending risk to the borrower based on the application form. ProstoFinance is the first such company in Ukraine with this kind of risk-assessment system, which is provided by a Hungarian company called Statlogics and used in other CIS countries.
The credit unit has also signed an agreement with state-owned Oshchadbank, which boasts Ukraine’s largest branch network, to facilitate the reception of loan payments from the public.
ProstoFinance CEO Eric Blanchetete said that although his financial institution had yet to increase advertising and PR, it has already moved forward on regional development. In addition to its main office in Kyiv, ProstoFinance has opened a branch in Dnipropetrovsk.
“We are close to opening regional offices in Odessa, Lviv, Kharkiv and Donetsk. By the end of 2006 we will move to the next stage, which will be an expansion to smaller cities,” Blanchetete said.
Special financial services made up 13 percent of Societe Generale Group’s activities in 2005, a two-fold increase over the last five years, said Jean-Francois Gautier, director of the specialized financial services division at Societe Generale.
Credit units like ProstoFinance have been created in 34 countries. A year-and-a-half ago, Societe Generale opened one in Russia called Rusfinance. Within eighteen months Rusfinance expanded to 38 cities.
At the same time that Societe Generale opened its subsidiary in Ukraine, it bought a large regional bank in Samara, eastern Russia, called Promek. Soon Rusfinance and Promek Bank will integrate under the brand Rusfinance Bank. New areas of development include providing loans by phone and the Internet.
For now, Ukraine’s ProstoFinance will continue to finance only furniture and appliance purchases, with car loans slotted for April. Societe Generale is still looking to buy a bank in Ukraine.
Societe Generale is one of the largest financial services groups in the euro zone. Its net income in 2004 was 3.1 billion euros ($3.7 billion). Founded in 1864, the group operates in 34 countries with interests in retail banking and financial services, global investment management and services, and corporate and investment banking. ProstoFinance’s statutory fund is about 2 million euros.According to data from the credit unit’s commercial director, Gael Dubosq, Alfa Bank is ProstoFinance’s main competitor for consumer credits. Serhiy Sliunko, Alfa’s director for consumer credit business development, said that all Ukrainian banks offering commercial loans can soon be expected to offer lower processing times, and that services will definitely improve over the next two years with no significant increase in prices or service fees.
