MCB Finance Group

Small loans specialist MCB Finance (MCRB) hopes to ramp up its expansion into Eastern Europe as customers continue to flock for its service. MCB was set up in 2006 and provides unsecured loans to retail customers of between €100 and €2,000 that can range from two weeks to two years.

The business is predominantly generated online with its focus on Finland, Estonia, Latvia and Lithuania. With a highly automated and scaleable software product the decision making process takes just a few minutes. The main trading subsidiary is Credit24 with websites in each country generating increasing internet traffic. MCB also has several distribution partners including Maxima, the largest retailer in the Baltics.

Though the economies in its areas of operation have struggled during the credit crisis with high unemployment rates MCB appears to be on the up. Last year lending volumes accelerated through the second half and should surpass the €40 million loaned out in 2009. Latvia has proved its most problematic market as customers struggled to pay back loans however MCB is doing well at collections.

Due to the seasonality of its business the second half tends to be stronger with profits expected for 2010 of €400,000. MCB has expanded its product range to include a ‘Express loan’ in Finland. In the UK the success of Wonga, a provider of loans of up to £400 is further proof of the concept. MCB says its customer base is 50:50 male to female with loans taken out for everything from travel to Christmas presents.

The shares have doubled in recent weeks after following some director buying however results due in mid March will allow investors the opportunity to further assess its progress. Speculative buy.