“Consumer loans are doing much better than last year, we have growth thanks to a 9.8% growth in consumption registered in the first quarter. We’ve set a growth target of 10%,” said Gauthier van Weddingen, CEO of UniCredit Consumer Financing, at a press meeting held by ALB Romania.
BRD Finance general manager Antoine Gabizon said consumer lending is tightly related to economic growth and the industry suffered when economic growth was low but consumer lending is growing at a faster pace now that confidence has been restored and finances have stabilized.
Consumer lenders base a large part of their activity on partnerships with retailers, offering financing in stores, even on weekends, to the detriment of banks, which don’t have such flexible schedules. Although they require minimum paperwork in such cases, consumer lending companies say risks are under control and creditworthiness is checked using advanced software.
“We have scores for every client, we are often more cautious than banks and we use very advanced and very expensive software for check-ups,” said Aristeidis Papathomas, general manager of ERB Retail Services, controlled by Greece’s Eurobank, which also owns Bancpost on the local market .
Consumer lenders said their market share in the sale of consumer goods is between 10% and 20%.
The durable goods market stood at EUR1.73 billion last year. The biggest sales were in telecom (EUR472 million) and IT (EUR455 million), followed by household appliances (EUR337 million), electronics (EUR285 million) and small appliances (EUR114 million), according to market research company GfK.
Non-banking financial institutions granted EUR1 billion in consumer loans, accounting for 9% of total consumer lending, which stood at EUR12.1 billion, The rest was covered by banks.
ALB Romania members on this segment (Cetelem, BRD Finance, ERB Retail Services, Garanti Credite de Consum and UniCredit Consumer Financing) granted financing of EUR857.5 million last year, of which EUR806.87 million were consumer loans and EUR38.66 million were car loans.