Fintech group Denum enters the installment market

The BNPL market (buy now pay later, “buy now, pay later”, payment for goods in installments) may soon be replenished with a new player – since autumn, the Denum fintech group, created by microfinance organizations, is going to fully work on it. A new fast-growing direction may be attractive against the backdrop of tougher regulatory requirements for MFOs and a decrease in their margins. However, it requires the development of new models, which may limit the presence of microfinancers in the segment occupied by the largest banks and marketplaces.

Fintech group Denum, founded by MFC MigCredit and MCC Papa Finance, is entering the BNPL market. Kommersant was told about this in the company. The project was launched in pilot mode in March, after all the improvements and analysis of feedback from users, the Denum Pay in installments service will be launched in September.

Denum Pay in Parts is already working with household appliances and electronics stores (M.Video, Eldorado, DNS, Technopark), clothes and shoes (You wanna), furniture (Mebel Grad), medical services (Etnamed, “Family Doctor”), lists the company’s CEO Maria Filimonenko. It offers a limit that is quite high for the market – up to 300 thousand rubles, while other market participants rarely have more than several tens of thousands of rubles. As Ms. Filimonenko explains, “the product can be issued for four or six months, which allows you to work with larger checks.” Currently, the most common BNPL is four equal payments in two-week increments.

The BNPL market leaders are now Tinkoff (Shares), Sberbank (Pay in installments), Alfa-Bank (Share), Yandex (Split), CFT (PayStep), Ozon. According to Mikhail Burmistrov, CEO of Infoline-Analytics, the market volume in Russia in 2022 exceeded 30 billion rubles. Given the expansion of the range of financial services by marketplaces and the growth in the share of marketplaces in the online sales market, in 2023 he expects the market to grow to 90-100 billion rubles. According to Frank RG, in Russia the share of BNPL purchases does not exceed 1% of e-commerce, in 2024 the share is predicted to double. According to the FlexiPay installment service, at the end of 2022, the number of customers who use BNPL reached 3 million people.

As Ilya Soloviy, CFO of the online financial platform Webbankir, notes, the logic is clear why individual MFIs are looking at the BNPL segment – “this is an opportunity to bypass macroprudential limits.” However, despite the attractiveness of the segment, as well as the need to search for new niches and segments to compensate for the shortfall in income from tightening regulation (see Kommersant on February 27), microfinancers do not seek to massively enter a new market.

“BNPL is a specific model of work that requires attention and deep immersion. Now we are focusing on PDL and Installment,” Eqvanta Group noted. In addition, the Central Bank has not yet decided on the regulation of the BNPL market. According to Igor Smirnov, CEO of MCC Creditter, for many MFIs this is a signal “not to enter the market until the moment when the rules of the game are clearly defined.”

In any case, according to Mr. Burmistrov, it will be extremely difficult for MFOs to compete with the largest banks, ecosystems and marketplaces, so microfinancers are unlikely to be able to take even 5% of the market in the medium term.

Polina Trifonova