OREANDA-NEWS. July 15, 2013. A round table “Express Lending to Individuals: Main Trend of the Year?” organized by Sviaz-Bank and the International Analytics Unlimited Bank Club was held in Moscow.

The round table was moderated by Alexander Borisov, General Director of the Moscow International Business Association. He presented data showing the effect of consumer credit on Russia’s economy. “Annual retail sales in the Russian Federation run up to nearly 20 trillion rubles, of which 2 trillion, or 10%, are borrowed funds.”

In the view of Pavel Samiev, Deputy General Director of the Expert Rating Agency, this segment is the driving force of banking. To back up his view, Pavel Samiev made a detailed forecast of hazards threatening this market today – falling interest rates on loans, declining quality of loans, and market overheating.

Pavel Samiev also said that growth in retail lending, which also includes mortgages, car purchase loans, and express lending, cannot be regarded as star hour growth. Demand falls off and the Central Bank puts on squeeze. The Central Bank’s tough measures, though, are not related to risk exaggeration in retailing; rather, they are a response to the negative impact of macroeconomic performance. In this situation as well, retail loans will be growing at 30%, high enough for retail loans to remain the principal driving force.

Sviaz-Bank’s representatives spoke about the way in which express lending can help in this situation.

Alexei Bakhayev, Director of Sviaz-Bank’s Retail Business Development Department, said that competition is heating up in the market, and the banks are looking for ways to make borrowing as simple and convenient as possible and to reduce operating costs as well, and the year 2014 will be a period when the Internet bank and mobile bank will be the channels for loan applications to be handled and even retail loans issued.

Andrei Tochyony, head of the Bank’s retail lending section, discussed the structure of the retail products market. He spoke in his presentation about the way in which a bank can win competition for customers. “Many banks today provide services to their old-time customers only while they need an influx of new ones. New customers are brought in by express loans because speed is one of key factors influencing a customer’s decision-making. If a customer is not to be trusted, an early refusal of a loan helps the lender to avoid reputation risks and test and cultivate solvent customers, and offer them other products afterward.” The speaker emphasized the enormous significance of developing methodologies to put customers into appropriate segments at the product pricing stage.

Nikolai Bocharov, Deputy General Director of the Equifax Credit Services, LLC, spoke about a way to prevent fraud. He discussed principles underlying operation of a special-purpose system enabling banks to exchange information and prevent fraud, and named regions at the top of a list of defaulters on loans – Buriatia, Transbaikalia, Kabardino-Balkaria, and the Republic of Dagestan.

All round table participants agreed that financial awareness of the general public must be upgraded, and so must the banks’ professionalism for a civilized development of the express lending segment.

The round table was attended by representatives of Energoprombank, My Bank, Transcapitalbank, Primsotsbank, Gazprombank, Binbank, Chimeximbank, Home Credit Bank, Obrazovaniye Bank, and the Moscow Industrial Bank.