Non-bank lending trends for Ukraine 2019


The payday loans sector in Ukraine is developing rapidly, but fast growth does not mean high quality of the market. The number of new players increases from year to year. However, although demand is ahead of supply and the potential volume of the market is estimated at billions of dollars, not all companies will be able to work effectively on it. What trends need to be considered in 2019 in order to remain competitive?

Mobile technologies and individual approach to the client

The payday loan business definitely is moving online. In Ukraine, Internet penetration rates are relatively low – 65% of the population regularly use the worldwide network and 57% use smartphones. Nevertheless, these numbers are growing rapidly, as is the demand for online financial services. So, according to Google, the number of search requests in the category “loans and borrowings” in 2018 increased by 30%, while mobile traffic in this category exceeded 55%. This means that the share of online companies will increase and the main platform for communication with the client will be a smartphone.

Moving to online means more active use of the benefits that mobile and cloud technologies provide, as well as artificial intelligence for data processing. This will allow lenders to analyze in detail the behavioral and transactional models, as a result, to develop a more individual approach to each client.

Not all market participants in Ukraine today are willing and able to work correctly and effectively with Big Data, but this is where the potential for sales growth and investment attraction lies. Powerful analytics allows you not only to assess the current state, but also to make correct predictions for the future. This is important both for work with borrowers and investors.

More than loans

The growth of online lending today has already reached the point where a high-quality technical platform is not enough. Of course, the speed of data processing and making the decision to issue a loan is still a major advantage. But simplicity and speed is not an extra bonus, but an ordinary requirement.

In this race, those will win who find a way to offer more than “just money”. There are so many participants on the market that simple price level competition does not work. In 2019, companies should try to offer the client unique advantages – it can be anything from credit cards to personal financial advice.

One of the main trends: online lenders are feeling the need to develop long-term relationships with consumers. Simple transactional business models are no longer relevant, because innovations in this area have already surpassed the limits of standard credit terms. The cost of attracting and retaining customers gives rise to a business model in which lenders can offer growing credit lines, instead of having to go through the loan process from the very beginning every time.

Reputation is a key asset

Banks have adopted online tools for work long ago and now entering payday-style online lending space. In 2019, this trend will only intensify. Banks will continue to enter the online payday loans market by implementing digital apps. Their well-established reputation will allow them to successfully compete with alternative lenders who already work in this ecosystem.

That is why the question of reputation is relevant to the field of microcredit. The level of confidence to the microfinance sector is low, because of an inadequate degree of financial literacy of the population and methods of working with problem loans. But the situation is changing now and online lenders should Integrate financial education tools in their work.

We need to find ways to create additional value for our customers, explore new niches and create alternative loan products. The main trends are focused, on the one hand, on maximum product personalization, and on the other hand, on universality, the ability to be a single financial instrument for solving problems.