Menora ERN Enters Consumer Credit Market, Aims for Major Player Status

Menora ERN, the credit arm of Menora Mivtachim, announced last week its expansion into the consumer credit sector, offering loans for various purposes to households and small to medium-sized businesses. This move signifies a broadening of the company's operations into a new market, as it previously focused on point-of-sale financing. Menora ERN currently manages a credit portfolio of approximately NIS 2.5 billion and operates in about 16,000 businesses.

In an interview with ice, Menora ERN CEO Shi Perminger explained the strategic shift, addressing the cost of living, competition with banks and credit card companies, and the company's prospects. Perminger clarified that this entry into direct consumer credit is not a substitute for a previously considered acquisition of Isracard, emphasizing that Menora ERN is wholly owned and has the capacity for this new venture with the backing of the Menora group.

Perminger expressed the ambition for Menora ERN to become a leading player in the Israeli consumer credit market within three years, serving both individuals and SMEs. He noted that while specific financial targets are not being disclosed, the company aims for significant market presence. He believes Israeli consumers and businesses are seeking greater flexibility and alternatives to existing credit frameworks offered by banks and credit card companies, a gap Menora ERN intends to fill.

Regarding the rising cost of living, Perminger observed a clear trend of Israelis actively seeking ways to manage their cash flow and extend payment options beyond those typically offered by credit card firms, indicating a growing demand in this area. He also commented on the broader market trend of non-banking entities increasingly entering traditional banking domains, fostering beneficial competition that improves consumer conditions.