The WISR Ltd (ASX: WZR) share price fluctuated in early trade but has found its feet and is currently up 2.13%. This movement comes after the neo-lender announcing 36% growth in loan originations last quarter. Wisr wrote $31.6 million in new loans in 2QFY20, with total originations reaching $163.8 million as at 31 December 2019.
In 1HFY20 Wisr originated $54.9 million loans, a 90% increase over 1HFY19, and a 35% increase over H2FY19. Wisr's new loan funding facility also became operational in 2QFY20.
CEO Mr Anthony Nantes stated:
The Company is at an exciting juncture with an aim to further accelerate growth. 2020 is shaping up as another big year for Wisr as we continue to drive our strategy to scale loan operations, deliver category defining products, and ultimately provide Australians with a smarter, fairer alternative when it comes to their personal finances.
The Wisr brand
Wisr brands itself as having a vision of improving customers financial wellness and offers personal loans of up to $60,000. Wisr's average loan size is $25,000 with a loan term of 4 years. Wisr@Work, a workplace financial wellness program, and Wisr App, a debt reduction tool, were launched last year and allow for low cost customer acquisition. The company has access to a number of B2B2C channels such as employers, health insurers, and superannuation providers that can distribute Wisr products to members.
Potential market
Wisr estimates the consumer lending market is worth $110 billion. Fintech online lending launched in Australia in 2014 and held 0.5% on the market in 2017, doubling to 1% in 2018. In the US and UK, fintech online lending launched in 2006 and by 2018 it held 38% of market share in the US and 25% in the UK. There is potentially scope for a similar take up rate in Australia.
According to Wisr, there has never been a better time to be a fintech operating in the consumer lending market. Local influences such as the Royal Commission, Open Banking, and positive credit reporting could facilitate the flow of customers to alternative lenders such as Wisr. These influences could also improve the ease with which alternative lenders are able to access relevant customer information and process loan applications.
FY20 outlook
In FY20, Wisr is looking to scale as it leverages previous forward investing in the Wisr ecosystem. Last year the company focused on creating the neo-lender model and building a strong brand that resonated with market. This year, Wisr aims to accelerate loan origination growth while benefiting from increased loan economics, which will generate a significant uplift in earnings from Q2FY20.
