The presentation shows the situation on the consumer credit market in Poland with particular emphasis on the participants in the form of loan companies to apply for Polish market big success. Authors analyzed the factors of the success of these companies, trying to guess what attracts them to Poland. They focus on a preliminary analysis of the business model employed by short-term lenders. Prezentacja przedstawia sytuację na rynku kredytów konsumenckich w Polsce, ze szczególnym uwzględnieniem firm pożyczkowych, które z powodzeniem zaistniały na polskim rynku finansowym. Autorzy przeanalizowali czynniki sukcesu tych firm, starając się odgadnąć, co przyciąga je do Polski. Uwaga została skupiona na wstępnej analizie modeli biznesowych stosowanych przez pożyczkodawców krótkoterminowych .

1. Identification of critical success
factors in short-term lender
companies in Poland
– business model analysis
title
CurrentIssuesinBankingSectorinPolandandEasternEurope
–WROCŁAW2013
Ewa Łosiewicz-Dniestrzańska, Adam Nosowski
Wrocław University of Economics
Department of Banking

2. questions
In the presentation we are analyzing the business
model of loans firms and we try to answer the
following questions:
• Which elements of business model decide
about their success?
• Are loans firms the competitors for retail
banks or they rather complement the loan’s
market?

3. definition
„A business model is a conceptual tool that
contains a set of elements and relationship
and allows expressing the business logic of a
specific firm.
It is a description of the value a company offers
to one or several segments of customers and of
the architecture of the firm and its network of
partners for creating, marketing, and delivering
this value and relationship capital, to generate
profitable and sustainable revenue streams”.
Seppänen M., Business Model Concept: Building on Resource
Components, Tampere University of Technology, Publication
745, Tampere 2008.

4. Value proposition
Customer
Relationships
Distribution channels
Revenue streams
businessmotivation
model

5. Business models
of loans firms
analysis

6. value
PROVIDENT:
• Easily available and express cash loan in value up to 7000
PLN (for new clients) or 10 000 PLN (for „good” long
standings customers), with weekly repayment (30, 45, 60,
90),
• Easily available means minimum formalities and possibility
of borrowing and repayment at home,
• Express is quite relative – between 24 and 48 hours.
WONGA.COM:
• Easily available and fast cash loan, offered only via electronic
channel. It is the same kind of product called „chwilówka”
(monetary loan for a short period of time),
• Maximum amount: 500 PLN, maximum period of loan’s
repayment: 30 days (possible 3 prolongations),
• Fast means 15 minutes. It is possible. This is achieved
through a fully automated application process.

7. customers
PROVIDENT:
• In 2012 Provident served 821 300 of consumers,
• the total amount of loans this year: 1,63 billion PLN,
• In Poland: 81% of consumers have got banking account,
• 24% of consumers have got savings account,
• 50% of consumers have got no savings,
• The average balance of outstanding debt: 690 EUR,
• Average consumer debt: 1 570 EUR / 143 EUR repayment.
WONGA.COM (Characteristics of Great Britain and Ireland):
• 68.4% of consumers are at the age below 34 (13.9% - customers
at the age 45 +),
• 55% of consumers claim to be single,
• 66.1% of consumers do not have dependents (children),
• 100% of customers have bank accounts,
• 100% of consumers have a mobile phone,
• 77% of consumers use Facebook.

8. PROVIDENT:
• customer charter – rights and obligations,
• competition „Truly customer stories of Provident"
and building an advertising campaign around it,
• information campaign „responsible lending",
• get the emblem „customer-friendly company”
• a reward Top Employers 2013,
• campaign „antychwilówkowa".
WONGA.COM (the company's own data for Great Britain and Ireland):
• OpenWonga.com dedicated service,
• Net Promoter Score for Wonga.com is 74%;
• ease of use indicator for Wonga.com is 80.8%, (7.2% of the
banks received this level)
• Readability communication index for Wonga.com is 63.8%,
(7.4% of banks achieved this level)
• Jargon Buster – „slang slayer” ;-)
relation
ships

9. distri
bution
PROVIDENT:
• hotline available 7/24 - the average time to answer is 8-9
seconds, in less than 20 seconds 93% of calls are
answered,
• 2 600 employees, 8 600 representatives,
• 44% of consumers considered consultant's advice the most
important argument when taking a loan,
• only 19% considered advertising as an important element.
WONGA.COM:
• Website supports the entire loan application process,
including the signing of the agreement by so called: fast
electronical way (paper option is a contract sent by mail),
• Respond times (responses and implementation of
transfers) are dependent on the availability of partner
systems (banks and institutions providing information
on borrowers/debtors).

10. PROVIDENT:
Weekly repayment schedule!
The cost of the loan (2 thousand PLN/30 weeks):
• transfer option – the total amount due: 2 563.27 PLN,
APR: 124.90%, weekly repayment: 85,45 PLN;
• option of „at home service” – the total amount to be
repaid: 3424.48 PLN, APR: 139.60%, 114.45 PLN weekly
repayment.
WONGA.COM:
Loan amount (500 PLN for 18 days)
• The total amount to be repaid 613.08 PLN, interest 3,08 PLN,
annual interest rate of 15%, commission 110 PLN, APR 459%,
• Need to make a transfer from your bank account to the
account of the company in the amount of 10 PLN/100,
which is to verify the customer's data.
After the verification it is RETURNED to the consumer.
income

11. motivation
PROVIDENT:
Vision: Provident is a leading institution offering a simple,
fair and transparent financial solutions.
Mission: Through continuous compliance with the highest
business and professional standards. Provident is building
close and based on trust, responsibility and long-term
relationships with our customers, business partners and
the communities in which it operates.
Values: respect, responsibility, transparency.
WONGA.COM:
Our mission is to solve consumers’ occasional, urgent and
short-term cash flow problems with an equally short-term
solution. We base our commitment to responsible lending
on transparency, flexibility and extreme selectivity –
believing it’s possible to provide credit in a way that
suits consumers, not lenders.

12. * - CAUTION! The image is not reality.
kontra
• modern company
"chwilówkowa"
• simple offer,
• focus on a young client
• electronic channels of
distributions,
• automatic verification of
creditworthiness (including
BIK, BIG-s, KRD - organizations
providing information on
borrowers in Poland),
• image-compatible with the
idea of „responsible lending”*.
• "lending" company with
traditions,
• simple offer,
• diversified client base,
• electronic channels of
distributions + „advisory”
channel,
• verification of
creditworthiness,
• improved image-towards CSR*.

13. assesment Value proposition
Customer
Relationships
Distribution channels
Revenue streams

14. conclusions Based on a preliminary analysis
we can conclude that:
• loan companies have different business
models, but some key elements are similar
("non-banking’s" customer base, specific
pricing - high APR that does not act as
disqualifying),
• additionally, the number of supported
transactions is significant, but their value
relatively low, which in fact (including earlier
comments) creates a specific niche.

15. Thank you for your attention
Ewa Łosiewicz-Dniestrzańska, Adam Nosowski
Wrocław University of Economics
Department of Banking
end