The brand name of Grupeer’s new loan originator is self-explanatory- “mikro” when translating from Polish means “not much”, and “kasa” means cash. Basically, it is the place where clients can get small amounts of cash very quickly.
The company was founded in 2006 by Andrzej Brzeski and Janusz Bigus. Before that, they ran their own financial companies, managing large human teams. An idea to establish a micro-crediting company came from the observation of the rapidly growing market of non-bank loans and a very good moment to establish such a company. Ever since 2006, the Polish market was developing dynamically.
They started small, funded with a small initial capital of the founders. Over time, the company has gone through rapid organic growth. The company was developing fast and went through various development stages and legal structures- from the limited company in 2009 to a joint-stock company in 2011. In 2013 the company debuted on the Catalyst bond market in Warsaw, which means that the company complies with reporting requirements set by the exchange.
The size of the portfolio grew considerably over the years too, it has reached an equivalent of more than Eur 25 Mln in 2018. The portfolio has had a compound annual growth rate of more than 40% over the last 5 years. They achieved such attractive growth not without the help of IT professionals. The company is one of the few having its own IT team and a very advanced IT system, which is owned by the company and constitutes a large added value.
Mikrokasa’s verification process of the potential borrower goes through a detailed analysis of the ability to repay the loan additionally, the borrower goes through the sophisticated scoring model, but it does not take more than 15 minutes. If the application was successful, the delivery of the money happens immediately, in 60% of cases, depending on the chosen method of delivery.
In order to receive a decision, all that customers need to do is complete the online loan application. To fill in the application potential borrower will need information such as bank account number, phone number, ID card number, PESEL number (Polish ID system) and some information on the financial situation.
The company attaches great importance to risk assessment, they are one of the first companies on the market to start cooperation with the Credit Information Bureau, obtaining access to full financial data of the client.
If the application is verified positively, the employee of Mikrokasa will contact the customer in order to provide information about the loan decision. Mikrokasa tries to evaluate the financial situation of all potential customers and is known for the responsible treatment of clients, not allowing them to fall into the so-called “debt spiral”. This translates to the approval rate of only 10%, the rest 90% get rejected. This is not only determining the low bad debt amount (below 10%) but also is an ethical business behavior, not exploiting the people who need money, because the interest rate is quite high. Such strategy is important for fast credit companies as main customers are people looking for quick financing of their needs, who did not obtain such financing in banks due to restrictive conditions of the later. Additionally, it is the company’s policy not to ask for a loan purpose- anyone who needs to borrow the money doesn’t need to explain what the money is used for.
A company providing consumer loans in Poland must operate within the limits set by the law on consumer credit. This Act defines the maximum fees beyond the interest that can be imposed on the customer. Depending on the period of the loan, the fees may not exceed 100% of the value of the loan granted (with a 30-month product).
The company has designed several products that work best for them in the Polish Market:
- Very short-term Pay-day loans up to 1 month, for an amount equivalent to Eur 46- Eur 695
- Mid-term loans starting from 12 months to 30 months. Clients can borrow an amount equivalent to Eur 230 to Eur to Eur 3500.
The typical customer of Mikrokasa loans is a group of people aged around 50 (average). Due to the fact that this group is the most solvent age group, the company’s loss ratios are among the lowest on the market. Around 16% of all issued loans are given to returning customers. This low number of repeat loans are due to the fact that the company provides loans for up to 30 months, so if the client applies for another loan, it often happens that his or her situation has deteriorated and they do not receive a loan (strict approach to risk assessment).
The fintech industry has many challenges- such as optimization of IT expenditure, maintaining the most advanced solution and the race to be the quickest. Mikrokasa is already among the TOP10 quick loan providers in Poland in terms of volume and the goal is to get into the TOP5. Eventually, their mission is to become the first-choice company for clients seeking non-bank financing.
Poland is one of the most promising countries in Europe, and the largest in Central and Eastern Europe, whose asset is a large educated young population. Grupeer is keen to bring its investors the most attractive deals available across the market and loans by Mikrokasa are one of them. Let’s welcome this ambitious fintech and invest to get the diversification and stable passive income!