Zaim Credit Systems PLC (LSE:ZAIM) said it traded profitably in the third quarter of 2021, its fifth consecutive quarter of profitable growth, with most loans now issued via its online channel.
"I am pleased to report that the third quarter of 2021 became the fifth consecutive quarter of profitable growth. Our operational results demonstrate the effectiveness of the online-focused strategy that we employed in the middle of 2020,” said Zaim chief executive Siro Cicconi in a statement.
The Russia-focused fintech group issued a record £6.8mln in loans in the three months to September 30, a rise of 196% compared with the same period of 2020 and 8% higher than the second quarter this year.
The CEO said Zaim is outperforming the Russian microfinance market, which grew by 35% year-on-year, while loans issued by Zaim almost tripled.
“Quarter-on-quarter growth remains strong at 8%, lower than in previous quarters due to a combination of a higher base effect and a deliberate business decision to temporarily restrain growth and offerings to new clients to improve profitability whilst technical improvements were made to Zaim's loans platform in September,” commented Cicconi.
The default rate increased to 24.5% in the second quarter to end-June due to a rise in first-time customers, who have a statistically higher probability of defaults, Zaim said.
The increase in default levels is in line with management expectations and is a result of the company’s strategy to maximise growth and gain as much market share as possible, it said.
READ: Zaim Credit Systems expects further improvements in cash flow, swings to interim profit
Zaim said its mobile application, launched in the second quarter of this year, made up 8% of total loans issued in September, comparable to the loan amounts issued via existing offline stores (11%).
The group's online channel comprised 89% of total business volume in the third quarter and continues to be the main engine for growth, evidence that the company has successfully completed its goal to transform from a purely physical company to a predominately digital lending company.
“Our plans are now to accelerate the digitalization of the company in order to target a broader market segment and much larger business volumes whilst keeping operational costs low,” said Cicconi.