Half of Romanian NBFI clients expect an improvement of their financial situation in 2013

More than half (53 percent) of Romanians that are clients of non-bank financial institutions (NBFI) expect their financial situation to improve in 2013, while close to half fear the domestic economy may worsen next year, according to an online Yougov survery carried out for Provident Financial Romania, a consumer finance provider.

The survey, which had 2,164 respondents, further states that 65 percent of the NBFI customers have taken a more cautious approach on daily expenditure compared to last year. A similar number of Romanians said they haven’t saved any money and 73 percent cancelled or delayed major investments in the next period.

Around 70 percent of those that can save money take out short term loans with small value, while 30 percent opt for credit cards. The loans have an average value of RON 5,000 (EUR 1116).

“Eight out of the ten surveyed said it would be hard or impossible to come up with money  in the case of an emergency at six out of ten don’t have a bank account. In this situation, it is of utmost importance for NBFIs to offer a convinient financing alternative,” said Ivo Kalik, general director of Provident Financial Romania.

Provident is set to issue EUR 100 million worth of credit, rather similar to last year. December is a key business month for the company, when demand goes up three times compared to a regular month and five times compared to January, said Ovais Siddiqui, CFO Provident Romania.

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Provident has 750 employees in Romania and plans to increase its headcount by 8 percent next year. Around 4,000 consultants cover 60 cities in Romania.

Siddiqui said there is still room for growth in Romania and explained that it takes around six years for a branch to “mature” and deliver a significant return on investments. Provident has been in Romania for six years and has invested EUR 140 million in the country.

“We expect to reach half a million customers in four years,” said Siddiqui. This figure would be double the current number of clients.

Provident, part of the British group International Personal Finance (IPF), registered a gross profit of GBP 4.1 million last year.

Ovidiu Posirca