The FINANCIAL — Populi Credit, an unprecedented new format of credit card released by the local retail network Populi and Bank of Georgia, is expected to attract 45,000 consumers.
“In 2007 15,000 Populi Cards were purchased. This year Populi Credit is expected to show three times increased indicators, at around 45,000. Only three companies operate similar products in the world’s supermarket trade networks,” Eugene Pichkhaia, Founder and CEO of Populi, told The FINANCIAL at a presentation held at the Populi Kazbegi shop on May 14.
Populi Credit is an improved alternative to the Populi Card.
Opening a Populi Credit account is free of charge and requires no service commissioning charges. The issuing price of the card is GEL 9.90.
Populi Credit can be obtained in Populi shops, it is not necessary to go to the bank. Populi Credit has replaced the Populi Card. In the case of the Populi Card, the procedure was different: you had to put some money on your account in order to use the card.
According to Pichkhaia, total revenues of Populi, expected at GEL 17.8 million (VAT excl.) for Q1 of 2008, are up by 180% compared with Q1-2007.
From the beginning of 2008 daily sales of Populi increased by 11%. Populi sales were on average GEL 177-197 thousand (VAT excl.) for the first three months of this year.
The income of Populi in 2007 reached GEL 48 million (including VAT) whereas the figure was GEL 17 million in 2006. The total trade of the network increased up to 12, 600 sq.m and the number of staff up to 1,500.
“We are planning to acquire 12 thousand square meters of trade area in 2008, in other words we are planning to open 30 more shops and 10 of them in the regions. We are also going to invest USD 17 million this year,” declared Pichkhaia.
Populi opened its very first store in September, 2001 in Tbilisi and in a four year period it became a company with a high dynamic growth. Currently Populi operates 31 shops, 8 of which are located in the regions. The network includes 23 Populi supermarkets and 8 Populi XL shops.
Currently Populi stakeholders are: Galt&Taggart capital, the U.S investment company Firebird Aurora Fund, German investment group Ostinvestor and Swedish financial institution EastCapital.
As the company stated, taking into consideration the economic situation in Georgia, developing a Visa Electron type of co-branded Populi Credit will perfectly replace the well accepted “post-paying” principle throughout the whole country.
With the help of Populi Credit, customers will have the opportunity to purchase any type of product and cover the debt on a monthly basis without being charged with any interest rates. The card is available for anyone whose monthly income is over GEL 100.
According to Pichkhaia, Populi Credit is a one-year and single-currency (GEL) credit card allowing a beforehand defined credit line between GEL 200 and 1,000. To utilize the credit line available on the plastic card you can apply a so called Familiarization Period which is effective for three months from the date of opening the card’s account.
During this three month period the credit line used in the retail trade network Populi will be free of interest rates. The customer will be allowed to use the credit free of interest rates if s/he covers the money in cash or spends it in any retail trade centres on a monthly basis.
Populi Credit can be used for the purchasing of any product and services in the retail trade network Populi as well as in other trade centres. A card holder can also cash Populi Credit at any time. Populi Credit is also free of commissioning charges when used in trade centres both in Georgia and abroad.
The date of calculation, when calculating the minimum expenditure on the card, is defined individually and in advance. Payment of the minimum expenditure has to be made at any date from the date of calculation including the expenditure payment date. The date of payment is the tenth day from the date of calculation.
Debt coverage can be done fully or partly for the credit free of an interest rate. When the Familiarization Period expires, if having covered the minimum expenditure by down payment, the customer can apply a preferential interest rate on the credit utilized in the retail trade network Populi, which amounts to 19.9% per year. In other trade centres the annual interest rate will be 29.9%.
Money spent from Populi Credit can be covered in those supermarkets of the Populi network where service centres of Bank of Georgia and POS terminals are available. Alternative ways could also refer to: service-centres of Bank of Georgia, internet banking, mobile banking and telephone banking, POS terminals, Pay Box of Nova Technology.
“The issuing of Populi Credit is a very important step for us and in general for the development of the retail network in Georgia. Populi Credit will replace the so-called “post-paying” culture. Because of a weak economic environment the “post-paying” approach is still quite effective in Georgia,” said Pichkhaia.
In a local market saturated with several brands like Goodwill, IBS, Livo Group, Populi is said to currently occupy 6% of the Tbilisi market.
“Nowadays Populi Credit is the only sophisticated product in Georgia. This card is considered for all the customers of Populi and will compete with all small and large rival shops which sell the same products. There is a variety of around 15,000 products at Populi,” added the CEO of Populi.
Populi claims to be a trademark standing for a wide range of high quality production of: exclusive brands, its own cuisine, a French bakery, café, meat and fish manufactories.
Populi is in partnership with over 300 suppliers including both local and international manufacturers. A considerable part of the assortment is produced in Bulgaria, Russia and Germany especially for Populi. The production is thoroughly controlled by network specialists and only then is set for sale.
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