SME Finance closes record year with 57% revenue increase
YEAR 2020 KEY HIGHLIGHTS:
- Revenue increased 57% to EUR 7.7 million, up EUR 2,8 million from FY 2019.
- Financing portfolio reached a record EUR 55.1 million, up EUR 22.6 million from FY 2019.
- Received EUR 80 million backing from the European Investment Bank (EIB), the largest EIB investment awarded to a fintech lender.
- A total of EUR 60 million in loans went to Lithuanian businesses through SME Finance under economic measures administered by the Lithuanian National Development Institution INVEGA.
- Financing portfolio composition: trade sector (35%); manufacturing sector (23%); service sector (19.5%); transport sector (13.7%); other (8.8%).
- New financial instruments introduced: long-term loans, leasing.
Lithuanian based SME Finance, the leading provider of non-banking business financing in the Baltic region, reported 2020 fiscal revenues of EUR 7.7 million, up 57% from the previous fiscal year, a growth driven primarily by a significant rise in the company’s financing portfolio, to a record EUR 55.1 million, up EUR 22.6 million from fiscal year 2019.
“The year 2020 was one of outstanding financial performance and innovation for SME Finance in the face of severe COVID-19 related turbulence in the Lithuanian and Latvian financing markets,” said CEO of SME Finance, Mindaugas Mikalajūnas. “As banks tightened lending conditions and demand for alternative financing increased, our decision to add long-term loans to our range of alternative financial instruments not only resulted in a significant growth of our overall financing portfolio from that of 2019, but also minimised the threat of financial exposure as insurance companies curtailed their risk appetite, which stalled the factoring sector. In 2019, factoring services dominated the company’s financing portfolio. During 2020, the share of factoring decreased to 27.5% while business loans accounted for 71.3%. ”
Continued successful cooperation with investors further strengthened SME Finance’s lending capacity to satisfy the growing demand for alternative lending.
A total of EUR 20 million in loans went to Lithuanian businesses through SME Finance under the economic measure Alternatyva administered by Lithuanian National Development Institution INVEGA, amounting to just under half of the total of EUR 50 million earmarked for this measure. SME Finance also distributed a total of EUR 40 million of ultra-cheap stimulus financing to the market through the INVEGA measure ‘Loans to the businesses most affected by Covid-19’.
By the end of 2020, the trade sector had a weight of 35% in the company’s financing portfolio, the manufacturing sector occupied 23%; the service sector 19.5%; transport 13.7%. “Our goal is to maintain a diversified portfolio composition in order to mitigate risk,” said Mikalajūnas
“Our full commitment to delivering faster customer time to value also played a key role in our remarkable success in 2020. Investing EUR 1.5 million over 2019 and 2020, we doubled down on launching a streamlined self-service platform for our customers. In 2020, customers were receiving financing approval almost twice as fast as before. The first of its kind in Europe, our self-service solution continues to offer the fastest factoring, short and long-term loan, and leasing approval processes in the EU for our Lithuanian, Latvian and Estonian customers. Moving into 2021, we continue to invest in our strategy to fully automate our self-service system and are confident that our leadership in customer experience innovation will drive continued momentum,” said Mikalajūnas.
- Anticipated factoring segment growth.
The first wave of funding received from the European Investment Bank (EIB) is expected to reach businesses by the first half of 2021. Of the EUR80 million received, 70% (EUR 56 million) will be granted to factoring services for SMEs and 30% (EUR 24 million) to factoring services for midcaps. Approximately 60% of the funds will be allocated to Lithuanian businesses, while the share awarded to Latvian and Estonian enterprises, in a common portfolio of factoring services, will amount to 20% each.
- Expected customer growth.
With the recent launch of a leasing service at the end of 2020, and with plans to further widen the range of financial instruments in 2021, continued customer growth is anticipated.
As part of a 2021 localisation strategy, the company expects to strengthen its position within the Baltic alternative financing market through its investment in the positioning of teams in Latvia and Estonia.
We are ready to work even harder in 2021, so if your company looking for financing, don’t wait, contact the professional SME Finance team now! Write a message on www.smefinance.lt, email firstname.lastname@example.org, social networks, or just call +37063411115. We are fully ready to help your business!