As stated earlier, when a financial
institution concentrates on a few core products, it is already taking an
important risk. We have therefore taken the decision to enlarge our product
line to include lending offerings for SMBs in the Russian regions, in addition
to corporate lending.
| Dmitry Leus |
- What motivated your decision to
develop SMB lending?
- Dmitry Leus: First and foremost, we came to the
conclusion that our financial positions would allow such an undertaking.
Secondly, we already had in-depth knowledge of this market and had the feeling
that we understood our future customers well. In addition, the platform was
already in place – a professional team, our prior expertise, functioning IT
solutions, in addition to regional presence.
- Which are the most popular
products your bank offers for SMBs? Are there any joint programs?
- Dmitry Leus: Our lending solutions for SMBs do
not exceed RUB 3m - with a minimal amount of RUB 30k and durations not
exceeding 3 years. Interest rates are calculated on a case-by-case basis
reflecting the client’s financial indicators, with a minimal interest rate of
15% p.a. For seasonal businesses, we may even provide for individual repayment
schedules.
To
qualify for a loan, a company must have been on the market for over a year, and
state participation should not exceed 25%. Also, the company’s headcount should
not be over 250 people. The company must have met all its tax and social
obligations. On the other hand, we do not have any preference with regard to
the nature of the business and are prepared to deal with companies operating in
such various sectors as shops, restaurants, hotels, software firms, building
companies, and car service stations. In short, everyone is welcome.
When
making the credit decision, we analyze a company’s business plan, its financial
situation, in addition to its credit history with other banks, etc. The company
should have sound financials and be profitable.
We
stimulate entrepreneurs to engage in joint ventures and are prepared to gain a
deep understanding of their core activities. Bank has an individual approach to every borrower.
We are interested in long-term partnerships with our corporate clients. Hence
we invite them to transfer their working capital to the bank. This allows the
bank to easily analyze its clients’ financial condition and provides our
clients with the opportunity to deepen collaboration through more favorable
conditions and interest rates.
We
practically do not take account-keeping commissions and, where we do, such
commissions are in stark disproportion to the liquidity provided. Rather,
having our clients’ account with us enables us to better understand their
operating activities, thereby increasing transparency. Based on my experience,
I can say that most clients remain faithful to us event long after the loan has
been returned. It means that we have finally gained their trust. They know that
they have earned their right for future preferential treatment. In addition, we
know the management team of such companies, their market standing, and many
other details.
- Over the last year,
Bank has significantly increased its presence in the Russian regions. What dictated such a move? Is it the smaller amount of initial
capital investments, the lower level of competition with other financial market
players, or a heightened focus on the revival of SMBs in the Russian regions?
- Dmitry Leus: This choice was determined by a
whole range of factors. First of all, corporate borrowers in the regions are
much more disciplined – their default rate is below 1 percent. Secondly, in
opposition to the capital, the regional credit market is not overheated. There
is a lack of financial institutions in small Russian towns, and clients are far
more attentive to new opportunities. Our regional network counts over 70
branches, with a rising tendency. Our strategy in this regard is very simple:
we open a branch, take it to its break-even point, and then we open a new one.
Finally, with regard to organizational issues, it is easier to set up a new
business in the Russian regions. Our managers have the opportunity to visit
their customers, evaluate their businesses, and establish a personal
relationship.
In
the long run, I see great potential in the revival of small and medium-sized
businesses in the Russian regions.
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