MME primed for growth in the years ahead

Fintech lender MoneyMe has released an impressive half-year update, which showed new loan originations rose to $114m in the six months ending December 31

MME is primed for growth in the years ahead amid record growth in loan originations and a marquee wholesale funding deal.

Fintech lender MoneyMe has laid the platform for strong growth in the consumer finance sector, and markets are starting to take notice.

The company has released an impressive half-year update, which showed new loan originations rose to $114m in the six months ending December 31, rising 21 per cent on the prior period.

The quarterly growth between Q3 and Q4 rose 52 per cent.

And those gains have continued into the March quarter, with new loan originations currently projected at $90m – 30 per cent higher on the previous record.

With strong momentum in top-line growth, markets are taking notice as MME shares rose for the third straight day following the announcement.

MME’s new lending growth is underpinned by a market-leading wholesale funding deal with a Big Four Australian bank.

Earlier this week, MME and its partner bank expanded the funding facility from $100m to $150m.

As a fintech lender, the funding agreement is central to MME’s ability to deploy efficient loan technology at significantly higher margins.

MoneyMe CEO Clayton Howes said: We made a step change in our cost of capital last September (with the $100m facility), he explained. Now our partner bank has increased that facility, which means we get more cheap capital to drive growth.

But importantly, he highlighted that the half-year results today only include three months of the funding facility in operation.

The next half-year (to June) will be a full half year of reduced capital costs, which will be quite dramatic for profits flowing through, he said. So we can already see that our June-half profit result will be super attractive because it will have the cumulative effect of those lower funding costs.

As well as the material lift in margins, Howes said the material expansion of the facility (to $150m) is also a testament to the strength of MME’s model.

We established the facility in December, and they’ve been so impressed with the calibre and integrity of our loan book that they’ve almost doubled down, he said. They contributed another 50 per cent in less than six months. So it’s really a testament to what we’re doing because they tested the book rigorously.