Micro borrowers are growing in price – Newspaper Kommersant No. 207 (7408) dated 09.11.

Against the backdrop of an unstable economic situation, the demand for borrowed funds, including in microfinance organizations (MFIs), is declining. It will not fully recover even in the high pre-New Year season, experts warn. On the one hand, competition for each potential client is growing, on the other hand, the number of available promotion tools has decreased. Against this background, the cost of attracting borrowers is growing.

The average cost of borrowing in the MFO market in the third quarter was 3.7 thousand rubles. This is 19% more than the previous quarter (3,000 rubles), according to analysts from the Moneyman alternative lending service, and at the level of the fourth quarter of 2021. Meanwhile, it is the last quarter of the year that is traditionally the peak season in the loan market due to the significantly increasing pre-holiday spending of their clients.

Moneyman notes that this year the segment has developed a “unique situation on the eve of the high season.” “The geopolitical environment has affected the level of approvals in the market. At the same time, demand fell, in the third quarter – by 15%, – the company explained. – All this leads to increased competition, which, in turn, leads to an increase in the cost of attraction.

However, Moneyman clarified, not all players are ready to actively join the competition in such a volatile market. According to the study, the majority of MFI players (45%) prefer to invest no more than 1–3 thousand rubles in attracting one client, another 40% allocate 3–5 thousand rubles for these tasks. and only the five largest players spend more than 5 thousand rubles.

Market participants confirm the trend. Despite the formally “high season”, by the end of the year there will be no significant changes in demand for microloans, which means that there will be no reduction in the cost of attracting borrowers, Roman Makarov, CEO of IFC Zaimer, is sure. According to the results of the quarter, this figure increased by 20%.

Some revival of demand on New Year’s Eve will occur, the top manager admits, however, “it will be at least twice as weak as usual: population tension remains, there are no prerequisites for abandoning the savings model of behavior.” Now this is already clearly visible in the more “expensive” segments of consumer lending, such as car or consumer loans, but “the wave will come to MFIs,” agrees Ivan Merinov, COO of Eqvanta Group.

“At the same time, lenders who still expect to make up for lost profits due to the decline in demand that has been going on since spring will only intensify the competition for customers. Therefore, the cost of attraction in November-December will continue to grow. And this trend will last at least until the spring of next year,” Mr. Makarov believes.

The global trend towards a change in the average cost of attraction will not appear until the end of the first quarter of 2023, Marat Abbyasov, Commercial Director of MigCredit, confirms. In addition to the general economic situation leading to a savings model of behavior of borrowers, this is also explained by regulatory changes – a possible reduction in the daily rate to 0.8%, which will reduce the marginality of the microfinance market. “This will be reflected in the cost of attracting customers, in the amounts that companies will be willing to pay,” he fears.

In addition to the rising cost, attracting borrowers is also complicated by the limited number of available promotion tools, primarily due to the blocking or withdrawal of a number of Western social networks and Internet services from Russia, which “puts pressure on the cost of attracting,” market participants note.

There is a general increase in prices along with higher requirements for the quality of traffic, explains the CEO of the Unicom ecosystem Dmitry Afrikanov. Against this background, some MFIs are reviewing their advertising portfolios and increasing the share of tools that, while reducing the cost per client, can maintain quality.

As a result, although companies are looking for more low-cost channels for attracting, in January-September, the absolute costs of marketing increased in almost all public MFIs, in most cases by 10-20%, adds Mark Savichenko, chief analyst at Ivolga Capital. Now, he believes, “every client becomes more valuable to the MFI.”

Polina Trifonova