At the end of 2018, the new company has been founded in Russia with the core mission- to bring affordable and fast online microlending to anyone who needs it. The founding team has projected the numbers of money lent and what was their surprise when all possible predictions have been overachieved. The company is called PlanetaCash and it’s lending volumes have literally skyrocketed to the moon.
Grupeer’s trusted partner in Russia was specializing in offline lending and had a network of branches across Russia. It was doing great, however, in 2018, the experienced management team saw that the target audience, who previously had limited access to the internet, now uses smartphones and most of the business is happening online. So, the management took a strategic decision to launch a micro lending company that would specialize only in online lending.
The transition process was not going to be easy, so they decided to prepare for the online lending segment parallelly with their existing offline operations. There are fundamental differences between online and offline lending business processes, so for the new segment, the new team of professionals was hired. Only the marketing team and head management have left form the offline business unit.
The first loan was issued on 21 of January 2019. What was the satisfaction, when by February 2019 the volume of issued loans has exceeded 10 times the volume of offline lending and reached 500 loans a day! Shortly after that, the offline segment was suspended and PlanetaCash has become the sole business stream. There is a saying in Russian- “how you will call a ship, that way it will sail”. Sounds like that’s exactly what happened with PlanetaCash (literally the planet of cash in English), the planet full of resources. It is clear that PlanetaCash is set for success in Russia, so there are ambitious plans- to expand to Asia and develop asset-backed lending operations in 2019.
Such performance during the first month, wouldn’t be possible without the experienced team behind the product, who from the beginning could build the winning product. Overall there is a provision to have 38 team players in the structure, however, currently, there are 22 employees.
The talented team, who are now steering the business development, all have an impressive professional track record of working in the financial sector and in top 10 micro financial organizations (MFO) in Russia. A financial market professional, Denis Kozhemyak, who has been CEO in known MFOs since 2012 with cumulative payday loan issues of over Eur55 million is heading the PlanetaCash. He has extensive experience in short term payday loans and aims to bring PlanetaCash in top 5 such providers in Russia by the end of 2019 and a dominant market player overall.
The synergy of these talented professionals has created a winning blend, that addressed the demand for payday loans in Russia. The product is technologically advanced and competitive on the market. Besides that, the trust of the client is the main component of the key pillars of PlanetaCash’s principles, that is why their logo is reminding the “lock”, which symbolizes the safety to each client.
The recipe of success is based on sophisticated scoring models that are built on big data. The algorithm is built in such a way, that the open and closed databases are analyzed in several stages, processing more than 100 parameters, then the potential customer’s online behavior and finally other non-statistical criteria. This proprietary scoring model has allowed predicting the client behavior and probability of default. The decision is made in under 3 minutes and probably will shorten in the future. The application approval rate is around 15%, which is in line with the industry average.
PlanetaCash offers payday loans with duration starting from as little as 3 days, to 30 days with the possibility to extend the contract. The minimum amount the client can borrow is Eur30 and the maximum is Eur400. The first-time borrowers get the 1st month interest-free and as soon as the customer returns, the daily interest rate will be 1.5% a day. The micro-lending market is quite competitive in Russia, so customers compare different offers and only then make a decision, so PlanetaCash chose such rates to be competitive on the market.
The target audience is 80% of the adult population in Russia. The current customer profile is Russian citizens aged between 23 to 65, with secondary and tertiary education with earning below the national average.
The average cheque so far is around Eur150 and the most frequent loan purposes are urgent needs that have to be covered before the salary arrives, credit card debt, vacation, house renovation, gifts or medicine. The industry statistical average says that around 60% of customers are taking loans repeatedly.
Not everything is so easy as it looks like. The payday loan industry is quite challenging right now due to the change of regulation in 2019. Many providers will have to leave the market; however, this is a benefit for new entrants such as PlanetaCash- they already are adapted to the new regulation.
Since the official launch, the portfolio is more than 5000 payday loans, which is around Eur700,000. By June 2019 the quarterly loan issue is projected to reach over Eur6 Mln and grow 30% every quarter. Such impressive growth is based on the expansion of client base until 2020. After 2020, the quarter-on-quarter growth is planned 7%.
The team attributes their accomplishments to being a brand-new player, that identified the real qualities that consumers are looking for in a lending company. This may be true and will help in the future, besides that PlanetaCash has a bigger mission- to educate the population about attractive opportunities for payday loans. The industry of online lenders is growing by the minute; however, the number of successful companies will decrease. Only the effective and adaptive market players with a sophisticated technological base will survive. The companies that will adapt their machine learning algorithms and automating all processes will survive will eventually have a competitive advantage, and PlanetaCash is one of such companies. Currently the cover the whole Russia and on track to conquer Asia. The ultimate aim is to become a top 5 MFO in Russia by the end of 2019.
PlanetaCash is looking up to famous fintech start-ups and tries to copy the best practices, however, they have their individuality. Their team is a mix of talented professionals, who helped to shape the distinct working culture who are hungry for success and work towards bringing the company to the next level. We at Grupeer love the style, qualifications, and targets of this promising company and offer our investors to participate and earn a premium return.