Fintech News

An Interview with the CFO of Kreditech

Kreditech CFO

Rene Griemens is the Chief Financial Officer (CFO) & Managing Director of Kreditech.

  • Over 20 years of experience in corporate finance, strategy and general management
  • Executed over 70 financial transactions worldwide, including two IPO processes

Rene Griemens, CFO, joined Kreditech in summer 2013. With his background in corporate finance and strategic management he leads the company’s global financial strategy. Rene brings in his financial and entrepreneurial expertise from 20 years in the banking sector and 15 years in building high-growth companies. He previously worked across Europe, in North America and in Asia for McKinsey & Co, Citibank, dooyoo.com, and IEG – Investment Banking. As an advisor or CFO Rene managed over 70 capital markets, M&A, debt and equity financing transactions, including two IPO attempts. He executed over 30 debt transactions, including bond issues, securitization and private debt placements. As a CFO Rene has built the Finance function (accounting, tax, controlling) of three startups. He holds an INSEAD MBA degree.

1) What is Kreditech and What does Kreditech do exactly?

Kreditech Group’s mission is to improve financial freedom for the underbanked by the use of technology. By combining non-traditional data sources and machine learning, we provide better access to credit and a higher convenience for digital banking services.  Our product offerings include consumer loans, a digital wallet and a personal finance manager designed to help customers manage their credit score and plan their spending.  We further offer “Lending-as-a-service”, allowing partners to integrate our credit products as payment method for online commerce or as a funding source for other purposes. Since our foundation in 2012 and we are headquartered in Hamburg, Germany. To date, we have processed four million loan applications through our subsidiaries. We are financially backed by world-class investors including J.C. Flowers, Rakuten, Peter Thiel, and the World Bank’s IFC.

2) How did Kreditech start and where did the idea come from?

Alexander Graubner-Müller, CEO and Sebastian Diemer founded the company in February 2012. They noticed that financial services are not available for a large percentage of the world population and that another large percentage only has access to poor financial services, meaning that banks do not serve their individual situation well. So they started creating the idea of building up a digital scoring system for underbanked consumers, which was then built into an end-to-end-consumer lending business.

3) What sets Kreditech apart from other online lenders?

Our core USP is a proprietary credit scoring model, which allows us to serve the 70%+ of consumers in the world who do not having an existing credit score. The algorithm is trained to identify what makes a person a good borrower: Therefore it looks at the potential customer’s ability and willingness to repay. Those who come to us typically do not have access to the financial system in their country and have now the opportunity to explore their financial freedom.

4) The Kreditech Group has processed four million loan applications through its five subsidiaries, including Kreditech Russia, generating an origination volume of EUR 125m in 2016. What has been the key to the company’s success?

For a consumer business, the most important factor for success is the customers’ satisfaction with the company’s products. We therefore believe that the key to Kreditech’s success has been a very high satisfaction of customers with the convenience and availability of our products. A key contributor to this satisfaction is that Kreditech is able to serve customers conveniently, transparently and with fair economics who have hitherto not had access to products at similar terms, convenience and transparency.

Beyond this we have focused on bringing in the strong investors with prestigious brand names in the investor community for equity and debt, helping us to build a strong capital markets story, which is essential for building a financial services business. Not least, we have been ruthless in bringing in the right professionals for managing this business, with the right mix of experience between consumer, technology and banking.

5) Kreditech Group’s subsidiary, LLC MFC “Kreditech Rus”, received the status of a Microfinance Company (MFC) on March 27, 2017 from the Central Bank of Russia. Why do you think the company was given this status?

The status is – among many other factors – based on Kreditech Russia’s strong capitalization, risk management, governance, prudent financial policies and strong owner support. Given that the Central Bank of Russia issues this status on a very restrictive basis, Kreditech is honoured to be one of the few companies in the market to have successfully completed the process.

6) As a Microfinance Company, what exactly does Kreditech Russia intend to offer consumers?

As a Microfinance Company, Kreditech Russia is going to continue offering consumer credit and investment products. We will continue to aim improving our products, including offering improved borrowing conditions for our Russian customers.

7) The Central Bank of Russia issues Microfinance Company status on a very restrictive basis. What should a company do to achieve that status?

The license has an extensive list of requirements including solvability, liquidity, planning, reporting, accounting, governance, ownership, and other typical aspects.

8) Briefly, tell us what has been happening in the online lending industry in Russia.

In 2017, the consumer lending market will continue to grow steadily. The new legislation contributes to improving the standards of the microfinance business in general: the number of “gray market” players will decrease, and only those companies that have been rigorously selected by the Central Bank of Russia will continue their work. Kreditech is constantly working on improving its services for the client. Due to the company’s AI-based scoring process, in 2016 the level of overdue debt has significantly decreased. The introduction of “SNILS” (Insurance Number of the Individual Ledger Account) will clearly further reduce fraud cases and therefore also positively affect the level of the unrecoverable debt. We have worked towards a positive reputation in the niche market of microfinance and the MFC status is another step towards this image.

9) Who are your biggest competitors in Russia?

Online lenders that do hold an MFC status are MoneyMan, Zaymer. In addition, I would name Ezaem, a non-credit brand.

10) How have things changed since Kreditech raised 10 million euro from a Japanese e-commerce company Rakuten in December last year?

We have particularly fuelled our Lending-as-as-service business and are currently working on a couple of new projects in that field. Other than that, we have over-delivered our issuing goals in Q1.

11) How does Kreditech find its borrowers?

New customers mainly come via marketing initiatives. Our in-country based marketing departments design and apply different strategies to position our products and our brand in the markets. Nowadays the consumer is more and more educated and informed about their different choices to meet their needs. Therefore, we put our focus on our customers’ circumstances and goals to improve the service provided to them – thus differentiating ourselves from our competitors. The finance sector is becoming increasingly competitive. Here Kreditech counts with the advantage of our five years of experience in the markets. We have developed a comprehensive view of who our customers are and where exactly we can find them.

12) What’s next for Kreditech? / What do you see happening in the online lending in 2017?

We will continue rolling out our strategy to growing our key markets, making our product better for the end consumers in Poland, Spain, Czech Republic, Russia and Mexico. In addition, we will continue growing in our second column of the business: Lending-as-a-Service. A new large market is possible to follow here soon.

13) What advice can you give entrepreneurs who want to venture into the fintech sector in the future?

Be sure you have the right business strategy and the right products for your customers, combined with the right investors/equity. Do not compromise on your vision; you may want to change the way there eventually, but don’t compromise on building value for your customers. Also, never underestimate the meaning of having top, experienced talent for bringing your business forward.

See Kreditech profile on Tech Directory. For more information, please visit the Kreditech Website on http://www.Kreditech.com

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