The main difference between the Romanian market and the other EU countries is the former's orientation toward long-term lending, believes Stephen Rice, general manager with UK's Provident Financial firm specialised in home credit.
"We are focusing on high values on the short term, whereas domestic financial institutions grant long-term large loans. This has been one of the interesting aspects about the Romanian market since we haven't seen this happen in any of the countries we operate in. I believe this is due to the norms set by the National Bank of Romania," says Rice.
He believes this long-term orientation of domestic banking institutions is not beneficial since "the longer the term, the more frequently people forget what they bought".
Having entered the domestic market early last year in the wake of investments worth 2.4 million pounds (3.5 million euros), Provident Financial is the only domestic financial institution specialising in home credit.
"Before entering the market, we'd conducted surveys about Romania that showed us the average wage was 80% of that of Poland and we drew up our budgets depending on this. When we got here, we realised everything was more expensive than in Poland because there are many wealthy people, but also many poor people," explains Rice.
Despite this gap, the British are satisfied with their results on the domestic market, both owing to the higher-than-expected values of granted loans and to the high level of paybacks.
Provident last year posted revenues worth 300,000 pounds (440,000 euros) and won 6,000 customers domestically, in the context where it started operating in April 2006.
Launched as a pilot-operation meant to test Romania's potential, Provident Financial may change its status this year also after expanding outside Bucharest, to Brasov, Galati, Braila, Ploiesti, Pitesti, Giur
