The WISR Ltd (ASX: WZR) share price is up more than 40% this year as the ASX fintech stock continues to grow originations at a rapid pace.
Wisr is an online lender offering personal loans of $5,000 to $60,000 on 3, 5, and 7-year terms. The fintech is distinguished by its innovative sales and marketing initiatives which focus on improving customers' "financial wellness". This approach is bearing fruit with a 36% increase in loan originations in 2QFY20 over 1QFY20.
Wisr CEO Anthony Nantes commented, "as we continue to redefine what is possible for a consumer lending company, our numbers are showing that consumers are looking for a fairer deal and a smarter alternative when it comes to personal finance. Our ability to offer loans through a purpose-led model is proving to be a real differentiator in the market."
Originations and margins up
Wisr originated $31.6 million in loans in 2QFY20, up 36% from the previous quarter. H1FY20 originations were $54.9 million which represents a 90% increase over H1FY19 and a 35% increase over H2FY19. As at 31 December 2019, Wisr had originated $163.8 million in loans.
Wisr's economics have benefited from the implementation of a new funding facility which became operational in November. This new facility resulted in an approximate tripling of average margin compared to previous loan economics.
The Wisr financial wellness ecosystem
Wisr brands itself as having a vision of improving customers' financial wellness. Wisr@Work, a workplace financial wellness program, and Wisr App, a debt reduction tool, were launched last year. The app has since recorded 54,000 downloads with customers paying off nearly $365,000 worth of debt since its launch.
The Wisr Ecosystem business strategy revolves around developing a platform to scale and grow through a combination of financial wellness products that complement its core lending business. Over 120,000 Australians have thus far been introduced to the Wisr Ecosystem.
Future growth
Wisr is well-capitalised for growth following its January capital raising. $33.5 million was raised via a placement of approximately 181 million shares. The proceeds of the placement will be used to support the scaling of the core lending business, the ongoing development of the Wisr Ecosystem, and to strengthen the balance sheet.
In 1QFY20, Wisr soft-launched its secured vehicle finance product through selected distribution channels. This product increases Wisr's total addressable market and is now generating revenue for the business. The product will be rolled out across Wisr's full range of distribution channels in late Q3FY20 and Q4FY20.
Foolish takeaway
Wisr's growth has continued at a rapid pace this year as the company's unique approach to distribution and marketing bears dividends. The move to an on-balance sheet funding model has significantly improved loan economics, with Wisr primed to take advantage of change in the financial services sector.
