Zaim Credit Systems PLC saw an 11.6% year-on-year growth in the amount of money lent out in the first quarter of 2020.
The lender, which operates in Russia and targets borrowers not well-served by mainstream lenders, said the amount funded in the first quarter rose to £2.55mln from £2.32mln a year earlier and £2.28mln in the preceding quarter.
The group continued to steadily increase its loan book during the quarter, taking care not to compromise the quality of customers and to focus on minimising the default rates.
The amount lent dipped a bit in March as the effects of the coronavirus (COVID-19) began to take hold. In April, the lender said it saw a significant decrease in demand, leading to an expected decrease of around 44% year-on-year in the amount funded, which the company attributed to the reduction in footfall throughout Moscow resulting from the measures enacted regarding COVID-19.
The company said it has decided not to try to grow the loan book at any cost during the COVID-19 pandemic and intends to run the book on a break-even cash-flow basis, which is to say it will only lend out funds that it receives from other loan repayments.
This policy will stay in place until more certainty of the wider economic impact has been established.
"The COVID-19 outbreak became the key challenge for us in this moment of 2020 and the main source of uncertainty for Russia and global economies. We had to change our plans to adopt to the new reality. The well-being of our customers and colleagues is a top priority for us and I have been very pleased with how we have adapted our business practices to ensure that we continue to safely support our customers,” Siro Cicconi, the chief executive officer of Zaim said in the first quarter trading update.
“The long-term impact of COVID-19 on the Russian economy remains largely uncertain. While we have solid experience in running our business during crisis periods, we feel the current ‘lockdown’ period is completely new to us, and we have decided to reduce the loan amounts issued in order to keep business at a financial and economic break-even level for the period of ‘lockdown’. This will protect the company from potential unexpected losses. We will re-start our growth plans as soon as we will have clearer view of the situation," he added.