Stream with leading representatives of the Ukraine PDL market

We decided to hold a stream with leading representatives of the Ukraine PDL market and find out what are the prospects in this market. As is already known after the quarantine, the lending market suffers greatly in any crisis. Almost all businesses in Ukraine are going through difficult times today. The PDL market froze, customers reduced loan payments. But don’t panic! SalesDoubler is looking for the answers for their affiliates everyday to overcome economic problems as soon as possible and return to a normal, familiar life.

So we decided to hold a stream with leading representatives of the Ukraine PDL market:

• MoneyVeo – Antronikova Olena, Maxim Paraska
• Money4you – Oleg Kuzminov
• MyCredit – Serafima Negoda, Roman Katerinchik
• CreditKasa – Vitaliy Soloviev
• SelfieCredit – Andriy Dokuchaev
• Alexcredit – Volodimir Donskov
• Новые Кредиты – Tamara Solovey
• Zecredit – Marina Krutko
• Miloan – Vasil Nikitin 
• SOS Credit – Mihaylo Pochekay

What was discussed during the stream with leading representatives of the Ukraine PDL market?

We talked, cheered each other up, exchanged experience of working in a crisis, and answered 8 pre-prepared most pressing questions:

1. On February 24. Was an action plan developed for such a situation? What was done first?
2. How did the client’s behavior change during martial law? What have you changed in your work with the client base?
3. What orders did the regulator give after the introduction of Martial Law? Did he consult with you, listen to your advice, requests?
4. Verkhovna Rada extended martial law until the end of August, but the business should work. What are you planning to do next?
5. Are you planning to adapt your product to new realities?
6. Part of PDLs started lending and already can make certain conclusions about client behavior. Has the default rate for new customers increased?
7. Are you planning to renew your cooperation with CPA?
8. Difficult question: What are your expectations and plans for the future?

The most common dissatisfaction of the representatives of the stream was the market fall. There was a problem with investing and portfolios were almost destroyed.

First reactions to change

Until February, almost no company developed an algorithm of actions for just such a case. After talking with market leaders, it became more clear that in the current realities, business needs analytics that will develop forecasts based on the state of world politics and the economy. Now forecasting is everything for us.

What has been done to save the business:

• suspended the issuance of loans,
• paid salaries to all employees,
• stop business and marketing
• office closures,
• implementation of loyalty programs to their customers, credit holidays, cancellation of interest on loans.

Recently, scoring has been tweaked for issuance to first and repeated customers.

Client behavior

The stream moderator, Oleksander Boyko, CEO of SalesDoubler, took turns asking participants questions so that everyone could share their impressions of the latest circumstances in their companies. All representatives answered with sincere emotions, because for everyone it is very personal “pain”.

How did customers react in the early days and now? How did you build the work with the portfolio and clients? How did you communicate and how did the client respond?

Good afternoon. In fact, there was no difference between a small and a big company. The same stress was experienced by all people, both Money4you employees and customers. The issue of loan repayment for customers was not in the first and not even in the second place. Speaking of our company, our pre-war portfolio, which we had, has already been exhausted precisely because of the war, of course. Risks for the company have increased significantly. I think my colleagues have gone through the same thing.
Clients located in the north, south and east, responded: “Don’t you understand? Here is the war”. This was already the case when we resumed communication with customers. Not immediately, but about a month and a half after the start of active hostilities. Of course, we immediately turned off lending, stopped accruing %, introduced a maximum of loyalty programs for our customers. We offered to pay off only the body, and we will write off all the interest. This still did not lead to the fact that customers massively began to repay loans, yes, someone took advantage of this opportunity, but the risk is still very high. The main conclusion is that the pre-war portfolio is already almost lost. Perhaps we will consider the NBU’s initiatives to resume lending. The main thing I wanted to say is that everyone was shocked. This is a challenge for us. The first thing customers did was refuse to repay loans. Then repayments gradually resumed, but the risks still became 3 times higher.

Oleg, “Money4you”

Several more streamers were unhappy with the fact that even after the implementation of the maximum possible loyalty programs, loan payments did not increase. On the contrary, people perceived it as a soothing mantra. Many customers expect the state to pass some kind of law, which will extend the loan holidays, or cancel payments.

With many people, companies simply lost touch. Some were forced to change their phone number, some are in the occupied territory, where there is no mobile connection at all.

Now all PDL representatives are looking for alternative ways to resume business and financing their companies. They frankly admit that these are very difficult questions and hard to solve.

Actions and assistance of the regulator during martial law

How can PDL business survive? What role should the state play to not lose entrepreneurs’ business in this market?

We, like everyone else, were not ready for such a development of events. New lenders tried to do their best to donate to the Army of Ukraine and canceled interest payments on the loan until mid-May. To our surprise, The National Bank itself started communication with associations with the question: “What can we do for you?”. It was very helpful and relevant. We really got a lot of delays. The main useful thing that our regulator has done, is that we have the ability to report within the time frame that everyone has. The state and the regulator should provide us with business support tools, so that we can direct these funds to the country’s economy. The simplest action which a person can choose is to wait out the crisis, but not in our case. We all think about adaptation.

Tamara “Новые Кредиты”

So far, streamers are not very satisfied with the fact that the regulator has reduced assistance, and even more so, they are not satisfied with the initiatives that he proposes. Ukrainian PDL entrepreneurs are learning to build business retention strategies. It is hard to talk about further development, but no one gives up.

Forecasts and personal views

Opinions and sentiments among PDL representatives were divided. Someone looks at the problem more pessimistically, someone more optimistically. Every expert has his own arguments about their own version of events.

If there won’t be support from the regulator and an adequate response to move forward will be very hard. What assets and funds can be used to resume lending? 

Hi all. In any case, if there is no support from financial institutions, then by the end of the year there will be very few of them. We also faced what my colleagues said: portfolio loss, customer non-payment and demand, because demand is not equal to the quality of customers. We need to know if they have an opportunity to work and pay, or if this product is right for them. So it’s all pretty sad if there is no refinancing, because loans are macroeconomics. There will be no purchasing power in stores without them, which will have consequences. They will not be felt immediately, but later, but then it will be too late.

If we don’t react now and support microfinance organizations, still ready to work on the Ukrainian market and trying to stay on it, in order to primarily support the economy of Ukraine — at the end of the year there will be 3-4 companies left. Now the credit market is trying to feel, is it possible to start from scratch with the clients that they have now. Who wants to take out loans and who are now in a slightly better position. I talked with colleagues, and they say that there are very few such clients now. If before the war there were about 100,000, now there are no more than 15,000 with whom you can work and lend. Therefore, all companies are fighting for a small piece of the market. The next 2-3 months will show whether the market has a future.

Vasil, “Miloan”

May I give you my opinion? I am now ready to argue a little with my colleagues about the fact that someone owes us something. Let’s be honest, we provide loans at 300%, so the last ones to be rescued in this market after the victory will be companies like us. Therefore, I ask you to be realistic. We all tried to build an honest business and be loyal to our customers. But we work in a super risky segment, each of us understands this, including our investors. We take this risk to make money. Therefore, I think that nobody will help us. I heard colleagues want to unite and file a complaint with the court for the payment of reparations. All this can be done to keep the legal department busy and not sit idle, but I don’t believe it will work. This is the first. Secondly, why is everyone working now? Here I agree with Vasil that everyone loves these companies as their children. And those who begin to rebuild risk models and look for their clients will understand that the unit economy is developing, then the funds used to restart this business won’t be difficult. Approximately $3 million can be found to get the company up and running. I do not agree with Vasily that we had only 100,000 clients. There were many more, about 300 000, now there are about 100,000 left. Based on our portfolio, our clients are acting prudently. Our checks are small, because customers apply for small checks. Of course, the portrait changes a little, but the market will certainly live.

Roman Katerinchik, “MyCredit.ua”

We are more inclined towards a positive resolution of the issue with the PDL business. People will work and restore anyway, and money for this is always needed. Of course, now it’s about keeping the business afloat and keeping people employed.

How Did the Stream with Leading Representatives of the Ukraine PDL Market Help?

The stream participants agreed that investments in the PDL market should be sought in Ukraine now. Previously, foreign investors were not particularly in a hurry to invest in the Ukrainian credit business, and now even more. Roman Katerinchik (MyCredit) claims that Ukrainian investors have already offered him their money. It means that not everything is as bad as it might seem. Subsequently, we are confident that foreign investors will be interested in Ukrainian credit companies.

As we already wrote, PDL is adapting to new conditions. They are fully focused on changing portfolios and rebuilding risk models. The market will remain, because it provides services that almost everyone needs. People adapt quickly, income changes, businesses start earning again. All these are good conditions for maintaining the PDL market.

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