ASX-listed fintech Wisr (ASX: WZR) has exceeded $200 million in loan originations within a tightened credit policy brought about by COVID-19 disruptions.
The company recorded $38.9 million in new loans during the third quarter of the 2020 financial year, representing a 23% increase on the previous quarter.
The milestone was reached with all Wisr employees working from home since mid-March with no disruption to normal business operations.
“Surpassing $200 million in loan originations while the entire company is working from home is a strong validation of our fintech business model, our proprietary technology and our high-performance culture,” Wisr chief executive officer Anthony Nantes said.
“We have demonstrated an ability to work remotely as the new normal without any impact to the business, delivering our services to prime Australian borrowers, while ensuring the safety and wellbeing of our staff,” he added.
Loan book growth
Wisr’s total loan originations now sit at $202.7 million and its loan book continues to grow, with an average credit score of 706 (compared to the Australian average of around 600), reinforcing the prime nature of its loan book and customer base.
After filling over $50 million into a National Australia Bank loan warehouse facility during the quarter, the company adopted a dual funding model strategy with previous off-balance sheet funding being utilised alongside the warehouse to reduce risk and optimise capital management during COVID-19.
Wisr said it will exercise “deliberate moderation” in loan originations through the current fourth quarter, as it takes a conservative view of the economic outlook.
“Wisr will be taking a prudent approach to loan origination… reflecting changed economic conditions with COVID-19 while focusing on growing the Wisr ecosystem of financial wellness products to support all Australians in these uncertain times,” the company stated.
“The Wisr ecosystem continues to rapidly attract thousands of Australians during COVID-19, with growth above management expectations,” it said.
Stress testing analysis has confirmed Wisr retains a low balance sheet exposure to high-risk industry segments and employment types which are likely to be most impacted by COVID-19.
The company has implemented a risk-based approach to factor in industries such as hospitality, tourism, airlines, arts, entertainment, sports, recreation, events planning, catering, and retail.
Only $300,000 (or 0.8%) of a total $6.7 million balance sheet exposure is within these segments.
Wisr has also reviewed its credit policy and origination parameters including reducing exposure to pockets of industry-specific risk, and portfolio management strategies for customers who may encounter difficulties.
“Wisr has further tightened its credit policy to ensure we continue to support our targeted prime customer base, while retaining our market-leading approach to responsible lending,” Mr Nantes said.
“This includes process enhancements to strengthen our verification of employment status and income stability during the period of COVID-19 disruption [to] ensure lending decisions are well considered from both Wisr and the customer’s perspective,” he said.
At mid-morning, shares in Wisr were trading 18.52% higher at $0.16.