Expert RA Rating Agency has upgraded the credit rating of Moneyman (part of IDF Eurasia) to ruBBB – rating with a stable potential. This is the highest credit rating among all Russian microfinance companies.
The ruBBB- rating comprises highly competitive positions in the MFI market, high profitability, sufficient capital and liquidity, as well as a high level of credit risk management and an adequate assessment of business processes.
The company demonstrates high operational efficiency indicators: RoA=37%; RoE=86% for the period from 01.07.19 to 01.07.20. Market positions are supported by a wide client base and geographical distribution (the company’s 100% online format has allowed to avoid the decline in business volumes typical for other market players during the period of quarantine restrictions).
The company has historically held one of the leading positions in the Expert RA ranking in terms of the amount of issued microloans: in the first half of 2020, the amount of issued microloans estimated 5.46 billion rubles, which is 14% more than in the same period last year. The company’s share in the amount of issuing microloans to individuals (PE) increased from 2.7% in the first half of 2019 to 3.4% in the first half of 2020, in the segment of ”before salary” loans the amount increased from 4.9% to 5.3%.
Due to the high capacity to generate capital, the company capitalized profit during the period of 2019 – the first half of 2020, which allowed to significantly increase the capital adequacy indicators (NMFC1=21.0% as of 01.07.20 against 8.3% a year earlier; the autonomy coefficient – 51.2% against 28.9%, respectively). The structure of equity capital is still dominated by a high share of retained earnings (92.2% as of 01.07.20).
Significant balances on bank accounts and high turnover of the microloan portfolio provided high values of forecasted liquidity (over 100%). Despite the high rate of business growth, the company generates positive net cash flow from operating activities during the period of 2018 – the first half of 2020, which allows to reduce the debt burden.
Capitalization of profit, attraction of bond funding and credit bank funds contributed to a significant reduction in dependence on PE funds as a source of funding (the share of PE funds in liabilities, net of reserves, decreased from 35% on 01.07.19 to 18% on 01.07.20).
The ratio of the expected CFO to the upcoming planned payments on obligations on the horizon of 4 quarters will be 243%. The Agency estimates that the probability of large payments during the rating period is low, including due to the low share of funds of the largest creditors in the resource base (as of 01.07.20, the share of funds of the largest creditor (bank) in gross liabilities is 11.8%; the share of funds of the 5 largest creditors is 20.7%).
The liquidity reserve to pass the offers and pay off the remaining part of the bond issue in December 2020 is sufficient to cover the potential payment without compromising the company’s current liquid position, taking into account the bank’s open credit lines.
As of 01.07.20, Moneyman’s assets (part of IDF Eurasia) estimated 2.6 billion rubles, and its own funds estimated 1.3 billion rubles (regulatory capital of 582.2 million rubles). The remaining debt on the main debt of microloans before charging off the reserves as of 01.07.19 is 4.33 billion rubles (1.6 billion rubles excluding overdue microloans for 90 days or more), the amount of microloans issued by the company for 8 months of 2020 estimated 7.84 billion rubles. Net profit for 8 months of 2020 estimated 673.0 million rubles.