Big 4 backed non-bank lender Wisr Limited (ASX: WZR) reported revenues of $26.2 million, which grew 163% from $10 million recorded in the previous corresponding period (pcp), driven by new funding partners and a surge in auto lending and personal finance.
Having now achieved 22 consecutive quarters of growth, the Company is on track to grow its $879 million loan book to $1 billion. This year it processed new loan originations of $268 million, up 84% from $146 million in the pcp.
Wisr CEO, Anthony Nantes, said, “We continued our unbroken track record of 22 consecutive quarters of new loan growth, and we hit a new monthly milestone of $50M in loan originations in November.”
In October 2021, the Company announced it secured its second loan funding warehouse facility, which holds $225 million from the $180 billion credit investor behemoth, IFM Investors. The warehouse facility has bolstered the Company’s growth and provided more liquidity for Wisr to originate new customer loans. There was also an introduction of two other funding partners, NAB and Revolution Asset Management.
The introduction saw NAB join the team as a senior funder and Revolution as a mezzanine funder, allowing Wisr to transfer across a portion of its loan book in a bid to boost its loan capacity. The mezzanine fund lowers the risk for Wisr in case of bad debts, and they can also borrow at significantly lower rates and pass on loans at slightly higher rates.
“With two Wisr warehouse facilities in operation and ready to drive significant, sustained growth, we’re in an incredibly strong position to push through our medium-term target of a $1 billion loan book, accelerate our revenue, path to profitability and operating leverage into (the second half of the year) and beyond,” added Anthony Nantes.
Wisr has been aggressively growing its market share with a business model that the Company states is “more than just lending”. Recently, the Company launched its proprietary credit score system, dubbed Wisr Score, which optimises its assessment of new customer risk-adjusted returns. The Wise Scoring system uses advanced data analytics to replace a traditional credit score. It provides an accurate view of a customer’s financial standing, which will help them avoid any bad debts and allow for faster loan processing time.
As part of its growth, the Company launched its first national brand campaign late last year for the 2020 Tokyo Olympic Games. The campaign ran a 30-second advertisement between events, leading to a 30% uptick in new customer sign-ups. This strategy helped the Company reach a 60% increase in new sign-ups for the quarter, bringing their total customer base to 551K.
While some borrowers will always go to the big four to fund their next purchase, some have shifted towards non-bank lenders. Big banks usually have rigid eligibility criteria and have a large corporate structure and branch network that is very expensive to run. Wisr tends to be more flexible with its lending policies and can process loans for applicants that larger lenders have rejected. Being a smaller company that operates entirely online, it has significantly lower overhead costs, allowing it to pass on its savings to borrowers in the form of lower rates.
Beyond their reporting figures, Wisr shares have fluctuated between a high of 34c and a low of 14.5c for the last two fiscal years. At the time of writing, the shares sit at 15c.