Wisr books 49% growth in loan settlements

Wisr has revealed in a disclosure to the Australian Securities Exchange that the total value of personal loan settlements in the first quarter of FY19 was $11.9 million, up by 49.9 per cent from $7.94 million in the April to June quarter and more than five times than the $2.11 million reported in previous corresponding quarter in FY18.

It marks the third consecutive quarter that the marketplace lender recorded loan growth over 45 per cent.

The total value of personal loan originations was $51.16 million in Q1 FY19, more than double the $23.32 million reported in Q1 FY18 and 30.3 per cent higher than $39.26 in the immediate previous quarter.

Wisr booked $5.75 million in net cash generated from financing activities in the July to September quarter, while cash and cash equivalents stood at $6.07 million at the end of the quarter.

The CEO of Wisr, Anthony Nantes, attributed the growth in loan settlements to greater brand awareness and “broadened” product offerings (including the launch of credit score comparison service WisrCredit), as well as to borrowers moving away from traditional lenders due to the misconduct exposed by the financial services royal commission throughout the year.

“Wisr continues to attract strong creditworthy customers at a time when many traditional lenders are seeing a fall in personal finance commitments,” the chief executive said.

“This is the beginning of borrower flight from the big banks. Findings from the royal commission into banking have prompted more Australians to look for better deals and a fairer, more transparent approach to financial services.”

The marketplace lender said that it saw a 26 per cent increase quarter on quarter (QoQ) in home renovation-related loans settled in Q1 FY19, a 17 per cent rise QoQ in vehicle-related loans, and a 33 per cent surge QoQ in lifestyle-related loans.

Wisr also reported a 17 per cent boost in the volume of online visitors during the quarter, with nearly 10,000 new subscriptions since the launch of WisrCredit in August. 

The non-bank lender outlined a number of other changes that took place during the quarter ending on 30 September 2018, including “significant upgrades” to its platform that resulted in an increase in “more creditworthy” borrowers and lower average loan interest rates.

Borrower creditworthiness reportedly reached “near record levels”, with an average score of 712 in Q1 FY19, compared to 675 in the same quarter in the previous financial year.

Wisr’s Intelligent Credit Engine was also updated so that it can extract data from a wider range of sources to make lending decisions, which Mr Nantes said demonstrates the lender’s “vigilance” in the area of responsible lending.

“Wisr is not able to automatically pull down two years of historical transactional data into [the Intelligent Credit Engine] to predict the future financial behaviour of potential borrowers,” the lender said in its disclosure to the ASX.

“The Intelligent Credit Engine algorithm then synthesised up to 110 data points to determine borrower suitability and personalise the interest rate.”

According to the marketplace lender, these improvements provide Wisr with a “competitive advantage” ahead of the open banking regime coming into effect and the recent launch of the mandatory comprehensive credit reporting (CCR) regime, though the legislation underpinning the CCR regime is yet to be legalised.

“We continued to deliver consistently strong credit quality — exceeding the target for arrears and book performance and continued to attract more prime customers,” Mr Nantes said.

“Today, Wisr customers have both high income and credit scores than the national average.”

The lender claims that it is “unlikely” to be impacted by the Senate inquiry into credit at financial services targeted towards Australians at risk of experiencing financial hardship.

[Related: Marketplace lender launches credit score comparison service]