In a year of rapid growth for Plenti, the company is well-positioned for another bumper festive season. 

Fintech lender Plenti Group (ASX:PLT) is anticipating a bumper Christmas celebration, bringing forward its $1 billion loan book target to this quarter, instead of March 2022.

The company achieved another record quarter for the three months ending September (Q2 FY2022). Driving Plenti’s growth has been record loan originations across its three lending verticals – automotive, renewable energy and personal.

It’s loan originations book grew by 140% to $256.4m in Q2, compared to the same quarter last year.

Loan originations in September were at $95.5m, 159% above September 2020 figures. Plenti has seen its loan book grow exponentially from just $385m in June 2020, to $915m today.

Plenti CEO Daniel Foggo told Stockhead as Australia reaches its vaccination targets, putting an end to costly lockdowns, the company is forecasting further strong growth.

“Despite lockdowns we grew 18% in the last quarter and as people come out of lockdown, we’re optimistic and think there’s going to be even stronger demand which will help our originations,” he said.

Plenti’s growth is seeing its billion-dollar loan book target brought forward to before December this year, with forecasts of also being cash flow positive in this time frame.

“To have such a substantial loan book shows we are a permanent part of the financial landscape, that we are building a sustainable business,” Foggo said.

“When you’re also profitable, from our perspective, these are very significant milestones coming together. “


Technology, customer service and structural shift

Plenti started lending loans as a private company in 2014 before listing on the ASX in September 2020.

Foggo credits the company’s success to its time in private ownership building strong foundations while leveraging technology.

“The key here is how quickly do you grow and use technology to operate more efficiently and given the strong foundations we built we’ve been able to put the foot down since we listed and that’s why our loan book has grown more than 100% year-on-year.” he said.

Foggo said in each of their lending verticals, large incumbents are losing market share and, in many instances, even stepping out of the market.

“In the personal loan market, the share of the Big Four banks has declined rapidly in recent years and in a more exaggerated form since COVID-19 came along, where people are moving online and looking for value and better experiences.” he said.

“In the automotive loan sector Westpac has just exited its automotive business, which is more than a $10 billion book, while Macquarie has exited its dealership finance business and that’s leaving a vacuum for companies like Plenti to build scale.”

To Foggo, being a major player in a game the Big Four once dominated is about delivering better customer experience and leveraging technology.

“To replace those incumbents is all about technology and delivering simple, slick customer experiences. Our job is to make it easier for the end borrower, brokers and other referral partners,” he said.

Foggo said finance customers have got more savvy, are looking around for the best deal and wanting a faster, easier process.

“When we first launched, banks had about 90% of the personal loan market share and that’s now below 60% and we expect this decline to continue – so there are real structural changes underway in Australia, which Plenti is perfectly placed to benefit from,” he said.


Quality lending a priority for Plenti

Plenti Group is focused on lending to prime credit customers and over recent years has further improved its credit quality through its shift to secured automotive loans and household renewable finance.

An increased use of warehouse funding has also reduced costs on new loan originations.

“We securitised $300m of loans in August with around 88% of those loans rated by Moody’s as AAA, so it shows how strong our loan book credit is,” Foggo said.

“Our average borrower has a really high credit score of 820 and an income of around $100k and stable employment.”

He said there was still substantial opportunity for real growth across Plenti’s key lending verticals and Plenti was “just getting started”.

“The automotive finance market is about $40 billion in annual lending and the personal loan market is about $15 billion in annual lending, so there’s plenty of runway for us to grow.

“As we wind the clock forward our focus is on being Australia’s best lender and that means market leadership in the lending verticals we’re active in, earned through delivering better experiences than any other lender.”

This article was developed in collaboration with Plenti, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.