Why the MoneyMe (ASX:MME) share price is charging higher

The MoneyMe Ltd (ASX:MME) share price is charging higher on Tuesday after the release of a trading update…

| More on:
high share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The MoneyMe Ltd (ASX: MME) share price is charging higher on Tuesday following the release of an update.

At the time of writing, the digital credit company's shares are up 3% to $1.53.

What did MoneyMe announce?

This morning MoneyMe provided investors with an update on its funding costs following a recent refinancing of its funding facilities.

According to the release, the company's funding costs have reduced to 4.8% from today following the refinancing of its Velocity warehouse facility and the AOFM's investment into its new major bank warehouse facility.

This is down significantly from 11.4% at 30 June 2020.

In light of this, MoneyMe intends to grow its customer base and target higher loan transaction value and higher quality customers with lower personal loan pricing.

Trading update.

In addition to the funding update, MoneyMe provided the market with an update on its performance in FY 2021.

It advised that its strong loan origination growth momentum is continuing. Originations were up 8% month on month in October to $19.3 million.

This is the highest level of originations since January 2020 and follows the 30% month on month increase in originations in September.

Management notes that its strong origination and gross loan book growth continues to be achieved while maintaining tightened underwriting parameters to reflect the COVID-19 environment.

The company's closing gross loan book was $145.1 million at the end of October, a 30% increase on the prior corresponding period.

MoneyMe expects its loan book to grow significantly during the current financial year, supported by more competitive pricing, wider product offers, recent product innovations such as PayAnyOne and MoneyMe+, and an improving trading environment.

The company's Managing Director and Chief Executive Officer, Clayton Howes, said: "Fully realising the step change reduction in its cost of funding is a truly fantastic and exciting landmark achievement for the MoneyMe Group. We welcome the AOFM as a mezzanine debt investor and look forward to fully leveraging the lower cost of funds and capacity from the new Major Bank warehouse funding facility to further grow and diversify our balance sheet to meet the needs of Generation Now."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Top ten gold trophy.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured a sour end to the trading week today.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why Boral, FBR, Origin, and Regis Resources shares are pushing higher today

These ASX shares are ending the week positively. But why?

Read more »

A woman is excited as she reads the latest rumour on her phone.
Share Gainers

Why Computershare, Core Lithium, Northern Star, and Vulcan Energy shares are storming higher

These ASX shares are avoiding the market weakness. But why?

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Materials Shares

How has the Liontown share price rocketed 15% in a week?

There's one factor that might explain Liontown's explosive performance of late.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why EOS, Novonix, St Barbara, and Whitehaven Coal shares are storming higher

These ASX shares are having strong sessions. But why?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a strong showing from ASX shares this Tuesday.

Read more »

two people celebrating good news, stock rise, price increase, positive announcement
Share Gainers

Why Ansell, Elders, Predictive Discovery, and Rio Tinto shares are storming higher

These ASX shares are having a strong session. But why?

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX's trading week was off to an encouraging start this Monday.

Read more »