viewZaim Credit Systems

ZAIM Credit Systems - First quarter 2020 trading update

RNS Number : 3736L
ZAIM Credit Systems PLC
30 April 2020

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For Immediate Release

30 April 2020

Zaim Credit Systems Plc

("Zaim" or the "Group")

First quarter 2020 trading update


Zaim Credit Systems plc (the 'Group' or 'Zaim'), the Russian focused fintech group providing financial inclusion for those consumers who are not well served by mainstream lenders, is pleased to announce a post period end trading update from its wholly owned subsidiary, Zaim-Express LLC, ('Zaim-Express') in respect of the first quarter of 2020.

Update on COVID-19 situation in Russia

The Russian authorities are taking steps aimed at containing the spread of COVID-19, including a travel ban with other countries, social distancing initiatives and a holiday period in Russia from 30 March to 11 May, that could be extended further based on the epidemiological situation. The authorities have also enacted the closure of non-essential businesses in Moscow and Moscow Region, where Zaim's main operations are focused and announced a set of economic measures and subsidies aimed to help affected business and the population.

In line with the current official guidance and the rest of the microfinance sector in Russia, Zaim continues operating via its physical stores during the holiday, as it provides a critical service supporting the primary needs of the Russian population as well as through its online presence. 

Prior to Government regulations in respect of COVID-19, Zaim had proactively implemented strict health and safety policies specifically tailored to COVID-19, including working from home for the entire head office staff, taking all necessary disinfection measures in our stores, such as using hand sanitizers, medical masks and more frequent cleaning of the customer zone. The clients can enter the shop in compliance with the social distancing prescriptions or one at a time. We continue following all the recommendations of local health authorities and the World Health Organisation.

As part of its growth strategy, Zaim has developed a convenient online platform, allowing customers to receive and repay loans via the internet or by phone in less than 10 minutes without leaving their homes, which is an important option in the era of social distancing that is critical for containing the pandemics. We can also deliver our Zaim MasterCard debit card to our clients and provide the loans through these cards.

Our strong capital and liquidity positions makes us confident in the sustainability of the Company's operations. We are going to continue providing our customers easy and convenient access to affordable financial solutions, which is very important in this volatile environment

First quarter 2020 trading update

As previously stated, the Board believes that the amount funded and the weighted average default rate are the key metrics for monitoring the performance of the business and presents these in the table below for 2019 and the first quarter of 2020, except for weighted average default rate that will become available after the end of Q2 2020:

Quarter Ended

Mar 19

Jun 19

Sept 19

Dec 19

March 20

Amount Funded (£'000)






Weighted Average Default Rate





See note


We have seen an 11.6% growth in the amount funded in Q1 2020 compared to Q4 2019 driven by strong demand at the beginning of the year and utilization of financial resources obtained during Zaim's IPO on 4 November 2019.

Weighted average default rate increased from 5.6% in Q3 2019 to 8.1% in Q4 2019. This was partially due to the more aggressive marketing of Zaim loans in November and December 2019, increasing the proportion of loans made to new customers from around 5% to 7% in November and 15% in December. New customers usually carry higher risk of default than repeated customers do.

In addition to the slightly higher ratio of new customers, it is the Board's view that the  impact of coronavirus pandemic has reduced customer's ability to repay loans which has slightly affected the default rate for December due to lower levels of repayments in March and April 2020 for the funds advanced in that month. In Q1 2020 the share of loans from new customers was 15.30% of the amount funded. Zaim has continued to improve its credit scoring system and expects to continue to see the benefits of this over the coming months.

Increase of loan book

The Group continued to steadily increase its loan book during Q1 2020 taking care not to compromise the quality of customers and to focus in minimizing the default rates whilst continuing to attract new business.

Amounts funded in each of the months of the first quarter of 2020 are set out in the following table:


Amount Issued Online



Amount Issued




Amount Issued
















Total First Quarter





Zaim continued to generate momentum for a continued increase in the amount funded since Q3 19 and into the first two months of the year, however this stalled slightly in March as a result of COVID-19.

 Network optimisation

As a direct result of the continued strategy of optimization of the business model and ensuring maximum returns for shareholders, the number of stores have been reduced from 92 outlets as at 31 December 2019 to 76 outlets as at 27 April 2020. The stores that were closed were the weakest performing and indications were that given the slow recovery in amounts funded post IPO and the anticipated reduction in demand due to COVID-19 these should be closed. Of the remaining 76 stores, 4 outlets are not in operation as they are located in shopping centers that are closed due to the coronavirus prevention measures.

Recent trading

In April 2020 we have seen a significant decrease in demand, leading to an expected approximate 44% decrease in the amount funded in April 2020 compared to March 2020. This is a direct result of the reduction in footfall throughout Moscow resulting from the measures enacted regarding COVID-19.


It is difficult to foresee how long the current Government measures in response to COVID-19 will be in place for or how customers will behave once the restrictions are lifted. As such Zaim is taking a prudent course of action by not seeking to grow the loan book, in line with its previous strategy, beyond its current level until the demand resumes and the ability of the Company to accurately forecast future cashflows reliably returns. As such it is the current strategy of Zaim to run its loan book on a breakeven cash flow basis, that is to only lend out the funds that are received from loans until more certainty of the wider economic impact has been established. This has the aim of protecting the Company from potential unexpected losses and deterioration in liquidity due to delays or defaults in collection.

In addition to restricting any new loans granted to the cash inflows from existing customers, Zaim has enacted a series of measures to reduce the cost base of operating its physical stores, this has been achieved by way of negotiating rent reductions with landlords as well as salary reductions for staff.

Together these measures are expected to enable Zaim to navigate the current uncertainty and be well positioned to capitalize on the expected rebound in business opportunities once restrictions start to be eased.

Our strong capital and liquidity positions makes us confident in the sustainability of the Company's operations and it is the intention to re-start our growth plans as soon as we will have clearer view of the situation.

Timing of Year-end results

Given the recent global issues effecting audit timelines and specifically international travel, the Company intends to rely upon an extension granted by the FCA for the filing deadline for annual results for the year ended 31 December 2019. This extension grants a further 2 months for the publication of the results due to the exceptional circumstances around the COVID-19 pandemic.

It is the intention of the Group to releases its Annual report including audited results for the year ended 31 December 2019 within the extended timeframe of 30 June 2020.

Timing of the Annual General Meeting of shareholders

The timing of the 2020 AGM will be announced to shareholders at the same time as the annual results and is expected to be held in London. Due to the Covid-19 outbreak in the UK and globally, Stay at Home Measures were passed into law in England and Wales on 26 March 2020, prohibiting public gatherings of more than two people who do not live in the same household, unless essential for work purposes.

In the light of this and following published legal guidance we are not permitting shareholders to attend the AGM this year. We therefore request that shareholders vote by proxy to ensure that votes are cast.

Siro Cicconi, CEO commented:

"The COVID-19 outbreak became the key challenge for us in this moment of 2020 and the main source of uncertainty for Russia and global economies. We had to change our plans to adopt to the new reality. The wellbeing of our customers and colleagues is a top priority for us and I have been very pleased with how we have adapted our business practices to ensure that we continue to safely support our customers.

The long-term impact of COVID-19 on the Russian economy remains largely uncertain. While we have solid experience in running our business during crisis periods, we feel the current "lockdown" period is completely new to us, and we have decided to reduce the loan amounts issued in order to keep business at a financial and economic break-even level for the period of "lockdown". This will protect the Company from potential unexpected losses. We will re-start our growth plans as soon as we will have clearer view of the situation".


Zaim Credit Systems Plc

Simon Retter

Siro Cicconi


Tel: +44 (0) 73 9377 9849

Alex Boreyko


Tel: +7 925 708 98 16



Beaumont Cornish Limited

Roland Cornish / James Biddle

Tel: +44 (0) 20 7628 3396

Optiva Securities Limited

Jeremy King / Vishal Balasingham

Tel: +44 (0) 20 3137 1902


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Quick facts: Zaim Credit Systems

Price: 2.55

Market: LSE
Market Cap: £11.14 m

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