Bulgaria is a rapidly developing country of the European Union and there is a considerable gap in consumer lending. Founder of StikCredit saw an opportunity and decided to fill this gap. The company provides unsecured loans (single payment and installment loans) to individuals in the range between 50 and 2500 euro for a period of up to 24 months.
The company was founded in 2013, 100% backed by shareholders’ capital. The brand name StikCredit is derived from the names of its founders Stefan Topuzakov and Kristian Kostadinov. The founders, with previous experience in the pawn brokerage and hospitality industries, saw that there exists a significant customer base in Bulgaria which is underserved by the banking sector. They decided that they could deliver to these potential clients a convenient and flexible credit solution.
Increasing competition and technological change are the main challenges in the industry that StikCredit is operating. However, they are trying to outpace the competition by offering a better client experience and are also betting heavily on technological innovation to stay on top of the race. The state of art technology allows to track and monitor key metrics in real time, allowing them to make instant adjustments in an effort to maximize return to investors.
StikCredit has built proprietary scoring models based on BigData that allows making a decision in 10 minutes whether to give a loan or not and another 5 minutes for money to appear on client’s account if the decision was positive, only 30% of all applications have a positive response.
The company obtains the client’s identification data which is then used to collect information from external databases about the client’s credit history and employment status. StikCredit also runs various fraud prevention checks and perform a phone interview with the client (for loan applications received through the website). All client information is then processed through the scoring algorithm that gives them an accurate estimate about the risk profile of the specific client which is then used to make the final loan decision.
Risk management takes a central role in managing the organization. Built upon accumulated consumer data that expands over half a decade, they have developed proprietary scoring algorithms to make sure their loan portfolio always stays within the preferred risk limits.
Responsible with their clients
When lenders are not responsible enough, the clients can fall into a debt spiral. This means that the industry StikCredit is operating has a significant social impact. Responsibility is embedded in the very fabric of StikCredit’s business. The target audience is employed Bulgarian citizens aged 18 – 65 years. However, the typical age of customers is between 25 and 45 years old with earnings within the low to medium income bracket. The average loan amount is approximately 280 EUR and is mostly obtained for house and car repairs, utility bills and electronics purchase.
The mission of StikCredit is built around their customers too: “to create an outstanding journey for customers through the whole cycle.” They manage to achieve this with a personalized approach to clients and they are flexible in addressing a client’s specific needs. The application is a three-click process, besides that the customer support is ready to answer inquiries instantly (telephone and chat). Additionally, clients have access to real-time information on their outstanding liabilities.
The good business practices always pay out- the current loan portfolio is approximately 1.7m EUR and annual revenue stands at around 1m EUR. Since its inception, StikCredit has issued over Eur 7 million loans. The number of issued loans has increased twofold over last year with 38% CAGR.
Access to StikCredit services is very high in Bulgaria. The company acquires customers using a mixed approach via website, office network and through partnerships with third parties. They also have put in place a robust CRM platform to ensure clients receive the attention they deserve and that they stay with StikCredit. The physical network with offices covers a third of Bulgaria’s population with 15 offices strategically placed in 12 different locations with plans to open new offices this year.
The launch of the website in 2016 has increased the number of clients and applications. Additionally, the website is integrated into the company’s technology and helps them leveraging on the extensive market information that they have acquired over the past several years of operation. The brand recognition is quite high in Bulgaria. This has been facilitated by the SEO team, who managed to bring StikCredit’s web page on the first page in Google for all keyword searches. This drives major traffic to their website. The number of applications increased over 3 times between 2014 – 2017. In 2017 they processed over 21,000 applications.
In the future, StikCredit wants to continue national expansion into other cities/regions and grow their online presence. Once they feel confident that they have established a firm presence and have perfected the service, there is a plan to expand into other markets in the region. The business is run on a proprietary platform that allows quickly scale operations and to add new outlets with maximum efficiency. The technology offers great automation of business processes and provides the company with a significant strategic advantage in terms of customer acquisition, risk assessment, and payment collection.
We hope that the addition of such promising Bulgarian fintech will bring our investors solid passive income and add diversification to their portfolio. Invest with confidence!