ZAIM Credit Systems PLC Secures Additional Debt Financing To Expand Loan Portfolio
The company said part of the £ 0.5million loan deal will be earmarked for “certain potentially high impact business development activities”.
ZAIM Credit Systems PLC () said its subsidiary Zaim Express LLC has entered into a loan agreement for an additional 50 million Russian rubles (£ 0.5 million) with a term of 1.5 years and a rate of 15% annual interest payable monthly.
The fintech company, which focuses on providing financing to consumers underserved by traditional lenders, said the funds will be used to increase its portfolio of active loans by funding its online operations, while a smaller part will be reserved for certain potentially high-impact business developments. Activities.
ZAIM said that with interest rates structurally higher in Russia than in Western Europe, the 15% annual interest rate is considered “reasonable” for an unsecured loan portfolio facility and the equivalent monthly rate. of approximately 1.2% for this additional loan agreement “compared favorable” to the current returns generated by its lending activities and is expected to have a “significant impact” on its financial performance at a critical time.
The company also said it ended 2020 with a “strong performance” which continued through 2021.
“We are pleased to see that our business, especially its online segment, is growing beyond our expectations. As such, we have found that we have had to restrict the supply of loans to new clients – this additional facility will help us fund some of that additional demand. We are pleased with the support from our existing banking provider, which adds further validation to our business model, ”said Siro Cicconi, CEO of ZAIM, in a statement.
ZAIM shares were flat at 3.8 pence when first traded on Tuesday.