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.
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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."
