German online lender Kreditech says the company is on track to “achieve profitability in the near future” as operating losses decline. At the same time, both income and creations have declined.
Fintech claims to have significantly improved its performance thanks to a new strategy implemented in 2018. Kreditech has undergone many changes over the past year, including a change in executive management.
According to Kreditech, their net financial results in 2018 improved 76% compared to the previous year. Kreditech claims that profitability is driven by “an evolution of the product portfolio, investments in innovations and effective cost management measures”.
Kreditech also closed on a recent funding round while announcing expansion plans.
Kreditech lends through its consumer brands, including Monedo Now and Kredito24, as well as through partners in four markets: India, Poland, Russia and Spain.
In 2018, the company focused on orienting its operations towards the near prime rate loan market, with installment loans being a key product.
Kreditech reports that in 2019, it “successfully transitioned” to growing its core installment loan product and reached its highest ever monthly loan issuance levels.
David Chan, CEO of Kreditech, said their results clearly indicate that they have made excellent progress in achieving their goals:
“We have been successful in growing into the ‘near-prime’ segment in most of our major markets, and we have continued, and will continue, in this strategic direction throughout 2019,” said Chan. “Our growth is supported by investments in basic infrastructure and the successful opening of new and exciting opportunities, such as obtaining an NBFC license in India, which allows us to expand into this high potential market.
Kreditech’s net losses decreased by 76%, from 58.4 million euros in 2017 to 13.9 million euros in 2018. Turnover decreased by 21.4%, from 71, € 4 million in 2017 to € 56.1 million in 2018.
The decrease in sales was offset by a reduction in impairments.
The net result is an increase in the gross margin (+ 32.3%) and a gross rate of return (38.7% in 2018, compared to 23.0% in 2017).
In 2018, Kreditech issued 107.3 million euros of credit in all the markets in which it provides credit services. In 2017, loans amounted to 185.2 million euros, a decrease of 42%.
The company achieved a turnover on commodities amounting to 56.1 million euros. This represents a decrease of around 21% compared to the previous year, which would reflect Kreditech’s change in strategic orientation from high-yield, short-term higher risk microloans to loans at higher risk. long term, demand for which it is said to be increasing.
Kreditech’s mission is to be the global leader in technology-driven consumer lending and the platform of choice in the near-prime market.