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For Immediate Release

15 November 2021

Zaim Credit Systems Plc

("Zaim" or the "Group") 

Third quarter 2021 trading update

Another record-high quarter of loans issued

Zaim Credit Systems plc, the Russia focused fintech group, announces a trading update from its wholly owned subsidiary, Zaim-Express LLC, ('Zaim-Express') in respect of the third quarter of the financial year ended 31 December 2021.

Highlights[1]:

Fifth consecutive quarter of Strong Online Growth confirms Zaim's transition to an Online Fintech Platform

· Business growth continues to fit within Group strategy to increase the market share whilst keeping a close eye on business profitability

· The Group continued to trade profitably in Q3 2021 - the fifth consecutive Quarter of Profitable Growth

· Another record-high quarter with £6.8m loans issued - business growth of 196% vs. Q3 2020 and 8% vs. Q2 2021

·  Zaim's mobile application, launched in the previous quarter, has already created a transformational new distribution channel making up 8% of total loans issued in September - comparable to the loan amounts issued via existing offline stores (11%)

With Zaim's online business channel now comprising 89% of total business volume in Q3 2021 and continuing to be the main engine for growth, Zaim considers that it has now successfully completed its objective to evolve from a solely physical company to a predominately digital lending company. 

Siro Cicconi, Zaim's CEO commented:

"I am pleased to report that the third quarter of 2021 became the fifth consecutive quarter of profitable growth. Our operational results demonstrate the effectiveness of the online-focused strategy that we employed in the middle of 2020.

We are significantly overperforming a very fast-growing market: the Russian microfinance market grew by 35% year-on-year [2], whilst the amount of loans issued by Zaim almost tripled [3]. We are investing in growth, being careful to maintain cash generation and profitability.

Quarter-on-quarter growth remains strong at 8%, lower than in previous quarters due to a combination of a higher base effect and a deliberate business decision to temporarily restrain growth and offerings to new clients to improve profitability whilst technical improvements were made to Zaim's loans platform in September.

Our branded mobile application, that we have launched in the previous quarter, has become an important sales channel: since its launch we have issued over £737k via the mobile application and over 44 000 people downloaded the app. In September 2021, the amount of loans issued via Zaim's mobile application reached 73% of the amount of loans issued via offline shops.

Management is also working on evolving the "Stores Network" into a Strategic Business unit. Despite the decrease of loans issued, our stores are still profitable and are strategically located in densely populated areas. We are launching in the coming months a set of fee based financial services that will leverage the physical accessibility of our flagship stores and will improve their profitability.

I am proud of the way our team has managed and addressed all the challenges associated with the Group's strong growth while we were beginning to operate in the online marketplace.

Our focus now is to seize the opportunity, as we are operating in a healthy, transparent and rapidly growing market and to continue to outperform this market. We see a significant opportunity in terms of value generation and introduction of new services and products.

Our plans are now to accelerate the digitalization of the company in order to target a broader market segment and much larger business volumes whilst keeping operational costs low."

Third quarter 2021 trading update

The table below presents the two main KPI's (loans issued and default rate) for the last five quarters:

The Group continued to see growth in loans issued during the quarter with an increase of 196% YoY and 8% QoQ, driven by growth in the online business.

The weighted average default rate increased to 24.5% in Q2 as a result of the increase in the number of first-time customers which inherently have statistically higher probability of defaults.

Notes: 

1 According to the Central Bank of Russia's latest available data, growth of the portfolio of microloans in Q2 2021 was 35% compared to Q2 2020

2 Loans issued by Zaim in Q3 2021 increased by 196% vs. Q3 2020

3 All figures presented throughout this announcement represent unaudited management information taken from the internally generated management accounts of Zaim-Express LLC

4 Default rate is defined as no payment received after 120 days of the origination of the loan

5 Data is not yet available for the quarter ended 30 September 2021 as the earliest time to determine default rates is 120 days after the end of the period

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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").