M.Video-Eldorado to acquire Russian lending platform Direct Credit Centre
M.Video-Eldorado Group, a Russian e-commerce company and consumer electronics retailer, will acquire lending platform Direct Credit Centre for RUB 1.3 billion ($17.93 million) from investment holding company SFI.
The acquisition is aimed at developing M.Video-Eldorado’s fintech business, as part of its OneRetail mobile platform.
Alexander Izosimov — CEO of M.Video-Eldorado said: “The launch of our own fintech platform based on a market-leading lending service is fully in line with M.Video-Eldorado’s strategic focus on creating the best shopping experience for our OneRetail customers — that is to say both online and in-store.
“Today, the Group is among the market’s tech leaders in online lending, offering its customers near-instant loan approval and SMS-based document processing options.
“In 2020, credit sales accounted for 17% of M.Video-Eldorado’s GMV, with the highest increase recorded in the online lending segment, which grew by 2.4 times year-on-year. The integration of Direct Credit services in the Group’s cutting-edge OneRetail platform, both online and in-store, will enable us to create a hybrid fintech market that is unmatched in the Russian market and that will be in high demand among our customers.”
Direct Credit Centre is among the largest credit brokers in Russia, making up 25% of the country’s point-of-sale (POS) lending market.
The company’s platform is said to bring together over a dozen financial organizations and banks, with large and medium-sized retail chains as well as e-commerce players among its clients, which include MTS, Rostelecom, Citilink, and others.
Last year, nearly two million loans worth RUB 74.2 billion ($1.02 billion) were issued via Direct Credit, of which online loans were 34%.
The Russian lending platform has more than 3,000 employees.
M.Video-Eldorado said that it intends to grow Direct Credit into a top fintech provider for the entire e-commerce sector, covering online and offline lending and payment services for partners and customers.
Through Direct Credit, the Russian consumer electronics retailer plans to export fintech solutions for the entire retail market in Russia and to further boost the former’s share in the country’s market for POS lending.
Presently, M.Video-Eldorado provides its customers a variety of in-store and online lending products from various banks and financial institutions, in partnership with Direct Credit and other firms.
The company said that Direct Credit’s lending platform has various advantages compared to directly working with banks. One of them is that customers can submit a loan application to multiple banks at the same time, which greatly boosts the chances of approval and enhances the customer experience.
Furthermore, the IT solutions used by Direct Credit and M.Video-Eldorado will help customers in getting a response to their application in few minutes, while loan approval takes an average of a couple of minutes in stores and online.
The deal is likely to be closed by the year-end.