Advising the Russians

Financial-advisory company Expander will soon open its first office in Moscow. If the Russian experiment works out, Expander may establish branches in other countries of the CEE region.

"Currently, on the Russian market, 90 percent of flats are bought with cash, just as was the case in Poland some 10 years ago, and the average price per sqm for a flat in Moscow is $3,500 (zł.10,846). Consumers don't know about brokers. There's plenty to be done and we want to implement our experience from Poland on Russian territory," said Małgorzata Zbierada, Expander's CEO.

Expander, part of GE Consumer Finance Group, wants to focus its activities in Russia on brokering mortgage loans. Krzysztof Karpik, director for banking products and responsible for the Moscow expansion, explains that there are currently no important players on the Russian market with a business model similar to that of Expander.

"In the case of mortgage-loan brokerage in Russia, the most important role is played by real-estate agencies and developers. They noticed that more and more people finance the purchase of their flats with loans and decided to capitalize on this trend by offering a more complex service," Karpik told WBJ.

The company believes the average loan it will grant in Russia will equal $100,000 (zł.311,000). In Poland, the average loan is just over zł.100,000, and zł.170,000 in Warsaw.

In Poland, Expander wants to create a network of mobile advisors traveling to customers. So far Expander's distribution channels include the company's own offices as well as franchised branches - 42 outlets altogether. By the end of 2007, the company wants to have 350 financial advisors.