Moscow-based microfinance lender, SimpleFinance said that it has completed the second round of funding with investment worth $15 million from the Japanese investment fund SBI Group.

The deal takes SBI Group’s total investments, including debt financing, to about $50 million, making it the largest minority stakeholder in the microfinance company.

Alexei Basenko, general director, SimpleFinance said: “We are very encouraged by the fact that SBI shares our interest in the SimpleFinance business model. By creating products focused on the needs of small and medium-sized businesses in Russia, we were able to rapidly expand our loan portfolio, which more than doubled in 2017 and is expected to double again in 2018. We have successfully implemented our unique credit platform, supported by patented technologies, and together with SBI we plan to develop and scale it further.”

SimpleFinance had secured its debut equity funding from the SBI Group’s $271 million FinTech Business Innovation Fund in September last year.

“After the completion of this round of investments, SimpleFinance intends to invite independent directors to the Board of Directors of the Company to further strengthen the corporate governance system,” the microcredit firm said in a statement.

With its lending portfolio at RUB 1.85 million, SimpleFinance topped company rankings of microlenders to SMEs in the Russian market, collated by the National Rating Agency in first half of 2018.

SimpleFinance said that the aggregate annual growth rate from 2016 to 2018 is estimated to be around 500%.

“With a scalable business model and exemplary risk management technology, in the first half of 2018, SimpleFinance demonstrated high ROE performance while maintaining excellent results in terms of loan portfolio quality,” the microlender said. “Attracted investments will allow SimpleFinance to continue work on improving the advanced technological platform and to support the rapid and profitable growth of the loan portfolio.”


by Parnika Sokhi