TIDMZAIM
RNS Number : 2979S
ZAIM Credit Systems PLC
15 November 2021
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For Immediate Release
15 November 2021
Zaim Credit Systems Plc
("Zaim" or the "Group")
Third quarter 2021 trading update
Another record-high quarter of loans issued
Zaim Credit Systems plc, the Russia focused fintech group,
announces a trading update from its wholly owned subsidiary,
Zaim-Express LLC, ('Zaim-Express') in respect of the third quarter
of the financial year ended 31 December 2021.
Highlights ([1]) :
Fifth consecutive quarter of Strong Online Growth confirms
Zaim's transition to an Online Fintech Platform
-- Business growth continues to fit within Group strategy to
increase the market share whilst keeping a close eye on business
profitability
-- The Group continued to trade profitably in Q3 2021 - the
fifth consecutive Quarter of Profitable Growth
-- Another record-high quarter with GBP6.8m loans issued -
business growth of 196% vs. Q3 2020 and 8% vs. Q2 2021
-- Zaim's mobile application, launched in the previous quarter,
has already created a transformational new distribution channel
making up 8% of total loans issued in September - comparable to the
loan amounts issued via existing offline stores (11%)
With Zaim's online business channel now comprising 89% of total
business volume in Q3 2021 and continuing to be the main engine for
growth, Zaim considers that it has now successfully completed its
objective to evolve from a solely physical company to a
predominately digital lending company.
Siro Cicconi, Zaim's CEO commented:
"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.
We are significantly overperforming a very fast-growing market:
the Russian microfinance market grew by 35% year-on-year ([2],)
whilst the amount of loans issued by Zaim almost tripled ([3]) . We
are investing in growth, being careful to maintain cash generation
and profitability.
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.
Our branded mobile application, that we have launched in the
previous quarter, has become an important sales channel: since its
launch we have issued over GBP737k via the mobile application and
over 44 000 people downloaded the app. In September 2021, the
amount of loans issued via Zaim's mobile application reached 73% of
the amount of loans issued via offline shops.
Management is also working on evolving the "Stores Network" into
a Strategic Business unit. Despite the decrease of loans issued,
our stores are still profitable and are strategically located in
densely populated areas. We are launching in the coming months a
set of fee based financial services that will leverage the physical
accessibility of our flagship stores and will improve their
profitability.
I am proud of the way our team has managed and addressed all the
challenges associated with the Group's strong growth while we were
beginning to operate in the online marketplace.
Our focus now is to seize the opportunity, as we are operating
in a healthy, transparent and rapidly growing market and to
continue to outperform this market. We see a significant
opportunity in terms of value generation and introduction of new
services and products.
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."
Third quarter 2021 trading update
The table below presents the two main KPI's (loans issued and
default rate) for the last five quarters:
Quarter Ended Sept-20 Dec-20 March-21 June-21 Sept-21
Loans Issued (GBP'000) 2,307 3,812 5,109 6,332 6,830
------- ------ -------- ------- -------------
Loans Issued Growth
Rate QoQ 42% 65% 34% 24% 8%
------- ------ -------- ------- -------------
Loans Issued Online
(GBP'000) 1,153 2,889 4,308 5,564 6,097
------- ------ -------- ------- -------------
Loans Issued Online
Growth Rate QoQ 205% 151% 49% 29% 10%
------- ------ -------- ------- -------------
Loans Issued Offline
(GBP'000) 1,154 923 801 768 733
------- ------ -------- ------- -------------
Loans Issued Offline
Growth Rate QoQ (7%) (20%) (13%) (4%) (5%)
------- ------ -------- ------- -------------
Weighted Average Default
Rate([4]) 15.8% 17.7% 20,8% 24.5% See note([5])
------- ------ -------- ------- -------------
The Group continued to see growth in loans issued during the
quarter with an increase of 196% YoY and 8% QoQ, driven by growth
in the online business.
The weighted average default rate increased to 24.5% in Q2 as a
result of the increase in the number of first-time customers which
inherently have statistically higher probability of defaults.
This increase in default levels is in line with the management
expectations and is a result of the strategy to maximise growth and
gain as much market share as possible. This is being diligently
managed and is caused by the rapid growth of online business and is
not due to any deterioration of business performance.
Notes:
1 According to the Central Bank of Russia's latest available
data, growth of the portfolio of microloans in Q2 2021 was 35%
compared to Q2 2020
2 Loans issued by Zaim in Q3 2021 increased by 196% vs. Q3
2020
(3) All figures presented throughout this announcement represent
unaudited management information taken from the internally
generated management accounts of Zaim-Express LLC
(4) Default rate is defined as no payment received after 120
days of the origination of the loan
(5) Data is not yet available for the quarter ended 30 September
2021 as the earliest time to determine default rates is 120 days
after the end of the period
Follow us on Twitter - @ZaimcreditSyst
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Enquiries:
Zaim Credit Systems Plc
Simon Retter
Siro Cicconi Tel: +44 (0) 73 9377 9849
Alex Boreyko Tel: +7 925 708 98 16
investors@zaimcreditsystemsplc.com
Investor Relations: Flowcomms
Ltd
Sasha Sethi Tel: +44 (0)7891 677441
sasha@flowcomms.com
Adviser: Beaumont Cornish
Limited
Roland Cornish / James Biddle Tel: +44 (0) 20 7628 3396
Optiva Securities Limited
Jeremy King / Vishal Balasingham Tel: +44 (0) 20 3137 1902
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
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