Kviku, whose loans you can invest in on Bondster, is one of the leading online non-bank financial institutions in Russia. Despite the pandemic, the company reported very good business results last year; its profit increased by 40% year-on-year to 1.6 million euros. Kviku wants to expand to Southeast Asia this year.
Thanks to the very good results, the company has also strengthened its presence in Russia and the neighbouring states. We asked Kviku’s CEO Nikita Lomakin how well the company did last year.
How did the company perform last year?
Our loan portfolio in Russia grew by 40% year-on-year despite the COVID situation, thanks to the fully online nature of our lending business.
So hasn’t Covid affected your company’s operations in any way?
None of our operating processes have been affected by any lockdown measures introduced by the government, as all our employees have been working remotely since 2013.
Has Covid somehow affected the ratio of repaid to outstanding loans?
Default rates have remained unchanged due to very low amounts (under € 100) of an average issued loan and no business loans in our portfolio.
Have the currency fluctuations of the last year somehow affected your business?
We have currently zero currency exposure in Russia, as 70% of our liabilities are RUB-denominated and the rest are hedged via EUR/RUB call options.
Have there been any changes in terms of financing your business?
Our license in Russia allowed us to maintain strong funding diversification with a solid long term (up to 3 years) deposit base in Russia from retail investors, as well as a 5-year credit line from a local bank.
Have your costs not risen significantly?
Our fixed costs remained historically low at around 2% of our monthly issuance volumes (payroll, credit scoring, processing, IT infrastructure), which allowed us to remain profitable during volatile 2020.
How did the company perform last year in terms of numbers?
- We managed 1.5x year-on-year growth of volume of issued loans in 2020 (€ 45 million).
- Net loan portfolio after reserves fully covers outstanding liabilities (€ 20 million).
- Profit before tax in 2020 grew over 40% in RUB terms vs 2019 to € 1.6 million, despite market volatility.
- Cash cushion of € 1 million on the balance sheet as of 2020YE.
- Top position in online POS country rankings, with 7 out of 10 top e-commerce merchants working with Kviku in Russia.
What is your outlook for next year?
And We aim to keep the growth momentum (1.5x projected growth year-on-year) in our core market in Russia in 2021, while also increasing our footprint in other countries of operation (Philippines, Kazakhstan, Poland, Ukraine, Spain). Strong financial performance and continued growth of Kviku Group in 2020 amid volatile market conditions proved once again the sustainability of our business model and a solid experience of the management team.
We also see continued strong demand for online alternative lending in Russia at the beginning of 2021, as traditional financial institutions continue to suffer from the COVID aftermath. We look optimistically into 2021 aiming to launch new countries in South East Asia and remain profitable in existing countries of operations.