Twino: review of 2018 financial report

23/11/2019

  • Received a couple of awards, Google and McKinsey on jury (tech and management)
  • Strong growth from the investor userbase point of view (4162 to 15706, purchased claims from 199 to 422 million euros)
  • Sound strategy upping loan quality, moving toward more trustworthy consumers and long-term loans
  • Customer checks were upgraded, more credit databases used
  • Major portion of loans to private individuals are current (15.607.439 out of 19.413.599)
  • Loans are sourced as follows (19.413.599 private individuals, 11.314.551 related companies
  • Turnover is as follows: 68% Russia, 16% Georgia, 7% Latvia, 6% Poland, 2% Kazakhstan
  • Cost profile: 3.766.160 sales, 294.748 selling expenses, admin 4.343.000, and other 21.143.582 (repayments)
  • 54 employees on average (employee turnover?), medium-sized enterprise

Loan data:

  • Days past due: <=0 - 18.468.397; 1-90 - 4.500.856; >= 90 - 3328
  • Management has decided to shift their loan model from sourcing them directly to acting as an intermediary between sourcing entities and its investors
  • Loans more than 30 days overdue are sold back to the lending company, except in Kazakhstan where a debt collection service is provided by the lending company

Liquidity risk: Twino's finance department updates the reserve daily, unless there is a bank run should be fine

Invests in 12 subsidiaries as of 31 December 2018

Cash reserves: 1.041.126

Client's point of view: since most investors do not speak Russian, I decided to take a look at their client-facing infrastructure.

  • Looks clean, clean design, gives a reputable impression, to my surprise, trust focused, not sketchy
  • 210 euros first loan no commission
  • Same website across countries and subsidiaries with minor changes and the actual subsidiary's name

Now let's read some reviews: Ezaem (Russia) has generally quite horrendous reviews (its rating on most russian review sites is between 1 and 2 out of 5), 2 main problems are uncooperative and rigid loan agents; hidden fees, selling debt to debt collectors? Zing (Kazakhstan) seems alright, ratings are pretty good, complaints are mostly regarding refusal to issue loan Moneza (Latvia) has mediocre reviews: the overall customer complaints are markedly lesser than for Ezaem but mostly the same

Average number of employees dropped from 76 to 54, lean management or bad sign?

2018 report with going concern assumption thanks to the company going in the black with 3662868 net profit

Alternative Lending Index developed by TWINO in collaboration with KPMG shows promising expansion avenues

Verdict: I recommend investing in Twino