The overall objective of The Romanian Consumer Credit Market Project was to provide our client with macroeconomic, regulatory, industry, sector, competitors, products and market information that will allow its senior management to make a decision whether or not to enter the Romanian market as a consumer credit multi-broker. This project is a proof for our ability to research, analyze and present data related to a complex industry and sector such as consumer credit.

Feasibility study for market entry

Our client in this project is the largest consumer credit broker in a EU country, operating a network of 2,300 agents and 3,300 points of sale countrywide. The scale of its operations means an average of 50,000 loan applications processed and 11 million Euro in loans financed each month (1).

All information provided within the project has been researched and in-depth analyzed by us from the perspective of supporting a formal feasibility study of such market entrance and addressed the following topics:

  • the business (in general terms, including taxes) and regulatory (in detail related to the financial sector, consumer credit, consumer protection, data protection) environment;
  • regulatory oversight activities and the division of responsibilities between various institutions involved in the consumer credit business;
  • potential partners and competitors from both the lender (banks and non-banks financial institution) and distribution partner sectors;
  • in-depth description of products offered by the major players from both the banking and non-banking sectors, such as maximum loan amount, interest and non-interest charges, loan duration, loan application and approval process (paper or digital) in various channels;
  • potential demand as determined by customer characteristics in terms of the overall number, income levels, geographic location, product/process preferences, use of proceeds, internet usage, etc.;
  • customer segmentation based on actual product usage: which customers use what products?
  • consumer credit brokers market in Romania, size and characteristics, key competitors analysis.

Competitors analysis

A whole chapter in the project report was dedicated to competitors analysis. It particularly addressed the following key points related to Consumer Brokers Market:

  • profile of major competitors and competitors’ analysis within consumer credit brokerage market (positioning, target customers, financial healthiness and sustainability, market share);
  • key figures and financial ratios comparisons: based on official data obtained from the Registry of Commerce and Ministry of Finance, we prepared a detailed analysis for each of the three main players of the brokerage market that took into consideration the financial figures and their key ratios over a 4 years’ period: 2013 to 2016;
  • set of comparative ratios between these three main players that highlights their level of productivity calculated as a mix of intermediated credit volumes to net turnover, the value chain of agent costs and the average percentage of agents’ costs to intermediated volume of credits;
  • characteristics of relations lender-broker and broker-agent (typical clauses in the agreements, commissions, division of risks and responsibilities);
  • financial and organizational feasibility of brokers’ operations (role of IT systems, cost structure, agents network and commission structure, major functions in the organization);
  • existing loan products by lender category and their characteristics, such as target customer group, loan value, interest and non-interest costs, duration, application and approval process (paper and/or digitalized) and its duration, application/client acceptance criteria, approval rates, default rates,
  • major distribution channels (online, off-line, lender-owned vs. independent, tied vs. untied) and their market shares;
  • brokerage processes and digital platforms;
  • the regulatory environment.

The main outcome of the project was an extended final report that provided a lot of information and understanding about the recent history, the current status and the trends of the consumer credit market in Romania. The final report was based on a draft version that was first submitted to the client and its feedback regarding certain topics to be addressed in particular. In this way we succeeded to tailor the information that we supplied not only to the general expectations but also to the specific needs of the client.

(1) Company details are not provided due to confidentiality reasons.