Provident Financial Romania adds 5 percent in lending to EUR 106 million in 2012 on higher demand

Consumer credit provider Provident Financial Romania registered a 5 percent hike in granted loans to EUR 105.8 million, helped by an 8 percent growth in the number of clients to over 260,000 and the expansion of the distribution network.

Provident Financial Romania, part of the UK-based International Personal Finance (IPF), recorded an 11 percent increase in revenues to over EUR 70 million, while the gross operational profit fell by more than 40 percent to EUR 2.7 million.

“2012 was a year of caution for the business and the customers.” said Ivo Kalik, general director of Provident Financial Romania.

He commented the business was hampered in the first quarter by the bad weather, adding it recovered in the second half, when the focus was on collection. This year, the company aims to accelerate growth on the existing infrastructure.

Provident representatives said the impairment level accounted to 30 percent of the revenues, representing the amounts they estimate clients will not be able to repay back. On average, a customer missed 11 payments last year. However, the company doesn’t sell receivables and uses its own department to recover the debt.

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Kalik stated the average loan value amounted to RON 1,550 (EUR 347), adding that 80 percent of the customers took out a second loan. People usually use the loans to buy new home appliances and cover healthcare bills.

The credit provider said it has invested some EUR 37 million to open six larger units in Northern Romania and in smaller cities. The company currently operates a network of 67 working points in Romania and is able to reach 85 percent of Romanians. It has over 750 employees and 3,800 collaborators.

Provident’s total investments in Romania exceeded EUR 160 million in the past seven years.

IPF to expand in Bulgaria and Lithuania

The Provident team in Romania will support the start of operations in neighboring Bulgaria, while the Poles will help develop the Lithuanian market, following a strategic decision of IPF. The expansion program runs a total cost of GBP 5 million.

“For the Bulgarian operations we will use the know how and infrastructure from Romania. We will use the team in Romania to open the market,” stated Kalik.

He expects the first Bulgarian loan to be granted in the second half of the year.

Ovidiu Posirca