Alexader Widera is about to start the first Polish fintech startup that will be providing B2B loans. Find out more about his views about the Polish lending market, experience with Kontomatik integration, the importance of data sources, and more.
Hey there Alexander, could you briefly describe your background and your role in Kredytmarket?
Hello, I am Chief Executive Officer of a Polish marketplace for B2B loans – Kredytmarket. I just turned 40 years old and I am coming from a purely financial background.
After I graduated from Warsaw School of Economics, I worked for pwcs, then mBank and most recently – at IPOPEMA, an investment company as a Deputy CEO.
And speaking more of Kredytmarket. What are its core services and how is it different from the others?
Kredytmarket has a pretty much straightforward meaning. It is a marketplace for the loans. The main distinction between us and any other company on the Polish market lies in the clients we service.
Unlike most of fintech lenders, we serve sole entrepreneurs (known as jednoosobowa działalność gospodarcza in Poland), and there is hardly any competition from any other fintech company.
Our main task is to connect legitimate entrepreneurs with wealthy investors and make sure that both parties can benefit from such a relationship.
How did you came up with an idea of Kredytmarket, was that a certain business pain that you experienced yourself or are you trying to bring an idea from another market?
Last year I left the company I worked for and it got me thinking about what to do next. Generally, I was choosing between two possible options: either to do a similar thing to what I was doing before or start a new project completely from a scratch. I decided to go for the later and had been looking for some inspiration.
After a few days, somebody showed me Funding Circle and I thought that with my investment background it must be possible to launch a similar service in Poland. I started conducting my analysis and understood that for SMEs and entrepreneurs is quite hard to get loans. In contrast, private investors would often be happy to finance such individuals. Apart from that, it is clear that micro companies in Poland are underbanked. And this is bad for the whole economy, especially when you consider that such companies account for 30% of the total GDP.
Once I double-checked the numbers, I became fully committed to launching a B2B lending company in Poland. I structured my thinking, polished my presentation and by the end of March 2016 I had my first and (so far) the only investment round, which accounted for 6 million zloty.
Consumer lending seems to be growing exponentially. What was the main reason to start with a B2B lending instead of microloans?
When you are starting up and begin from an absolutely scratch, you have to choose your direction. Going everywhere will not get you anywhere. I could either go for businesses or for consumers. And I realized that microlending is simply not something I want to do, mostly for ethical reasons. When you finance consumers, you are simply encouraging overconsumption. And this is not good. When you finance entrepreneurs, you encourage growth.
What kind of 3rd party technologies does Kredytmarket rely on?
We like to look at ourselves as an integrator. Our main task is to integrate as many useful sources of the data as possible, and based on this data, to perform a careful analysis that can identify credible entrepreneurs.
We are integrated with a customer’s’ bank account via Kontomatik API for lenders to get access to the transactional data. We also use Allegro data to extract customer cash flows from the marketplace sales (if he is a merchant). We also incorporate other data sources like credit bureau data, a database of the statistical office, behavioral data and much more.
How important is it to use a banking API in the B2B online lending space?
Nearly every fintech company relies on the fact that there are banks and/or bank accounts. Banks are large repositories of the transactional data, spending patterns and so on. A banking sector is a very important operator of the financial infrastructure and it is a shame not to use banking data for financial products.
Even though we are still not living in the times of PSD2, it is already possible to integrate banking data through 3rd parties, like Kontomatik, and the availability of such data certainly makes our offer in B2B online lending even stronger.
Recently you have started with Kontomatik. What were the main reasons for selecting exactly this API?
First of all, I wasn’t even aware of such a technology. I met Kontomatik CEO, Marcin Truszel, about a year ago at a fintech meetup in Warsaw and that’s where I learned about the availability of the banking data. Once I started with my own startup, I understood that banking data is a missing ingredient in my business model.
After I was sure that I need a banking API provider, choosing a proper vendor was not a hard choice. Due to my personal relationship and Kontomatik’s previous collaboration with such strong players as Alior and Idea Bank, it was a no-brainer to go for Kontomatik. Besides that, it is a technology that has the widest and the most stable coverage in Poland. Finally, the fact that Kontomatik was acquired by a European leader in fitench – Kreditech, gave me extra trust in the company.
How long did it take to integrate Kontomatik and how many people were involved?
Oh, it was actually quite easy. I cannot recall how many people worked on it, but I would assume that only person was needed. We have a total of five full-time developers and they are integrating data sources all the time, so it is not so easy to keep track on a single task. There were nearly no technical issues with Kontomatik integration, I can certainly tell that it went really smoothly. We, however, faced little challenges when we had to parse the data on our end.
Coming back to Kredytmarket, are you planning to go abroad?
We are just starting out in Poland, we are only releasing our platform on 6th of December. Hence, it is just too early to talk about a potential global expansion. Without a doubt, we would need to go abroad to grow, but at the moment we are not thinking about it. Currently, our main aim is to provide adequate financing options for entrepreneurs in Poland and lead this market. Next to this, I also feel that becoming successful in a certain country can only be done when you have local expertise and the first-hand market knowledge. We have this in Poland and we don’t have this anywhere abroad, as a result, our potential expansion will strongly depend on the people that will join the company.
Are banks your main competitors in Poland? How are you planning to take a slice of their pie?
Yes, currently there are no alternative financial companies that offer the same service as Kredytmarket. The only organizations that can issue loans for entrepreneurs are the banks.
My strategy is rather simple. I will make sure that a person can receive a loan at a similar interest rate, while the whole process of getting this loan will be fast and simple.
Due to the quantity and quality of connected data sources, Kredytmarket will afford to issue loans at a regular banking rate. However, our process is purely online. Taking a loan in a bank may take anywhere between two and three weeks, it includes waiting in lines and filling out quite a few papers. With Kredytmarket you don’t need to fill out a single paper. You just have to log in using your bank account, have your tax ID number next to you and, perhaps, you Allegro account credentials – and you are done.
We plan to issue loans for the period from three to six months. The size of a loan will be between 10,000 PLN and 50,000 PLN, which should cover a working capital need of most of the entrepreneurs. The interest rate will vary from 12% to 15%, where only 1% will go towards Kredytmarket fees and the rest will be given to the investors.