OKash Granted $ 250 Million In Loans In 3 Months, Opera Says In Third Quarter Report
OKash, the microcredit service, is growing at an incredible rate.
In the three months between July and September 2019, the service provided around 5 million loans valued at $ 250 million in Kenya, India and Nigeria. During the same period, the quick loans platform tripled its revenue to $ 39.9 million.
Owned by Opera, the Norway-based software maker, OKash uses credit scores and other information to provide short-term loans in minutes. The company offers a repayment period of 60-90 days, in line with Google’s new policy for loaning apps.
Originally founded by OPay, OKash was first launched in Kenya and exited beta testing in March 2018.
When it first appeared, the service functioned as the lending arm of OPay, a company incubated by Opera. But in December 2018, Opera has acquired OKash from OPay for $ 9.5 million. In 2019, OKash expanded to Nigeria and India.
However, despite its sale, in Nigeria OKash is still operated under the OPay app, a partnership that continues to confuse many people. According to Opera, “OKash in Nigeria uses the OPay wallet to transfer funds to and from its users.” But outside of Nigeria, OKash is a standalone app.
The loan service has experienced phenomenal growth since its release from beta in 2018. Within two months of its launch, the company would have processed $ 99,000 in loans Daily. In the last quarter of 2018, OKash issued 280,000 loans and generated $ 1.7 million in revenue.
In March 2019, the loan service became an important source of income for Opera. For the first three months of 2019, OKash’s revenue was $ 6.5 million, or 16% of Opera’s total revenue. Three months later, this figure doubled to $ 11.6 million.
But according to Opera’s latest financial report, OKash now accounts for 42.8% of all of its revenue, down from zero a year ago.
In the third quarter of 2019, OKash provided an average of $ 50 and underwrites around 5 million loans, giving it a total value of $ 250 million. “We financed the increase in the loan portfolio with a combination of local bank debt and our own liquidity,” said Opera’s chief financial officer, Frode Jacobsen said.
Although OKash made its first expansion a few months ago, Kenya is no longer its biggest market. His loans in Kenya averaged $ 40. But the story is different in India, its fastest growing market. Indian loans averaged $ 50.
Meanwhile, in Nigeria, OKash loans are “still really insignificant compared to all microcredit,” Jacobsen said. But the company expects that to change by 2020.
Although OKash is growing, the company has credit loss figures that have also increased.
In March 2019, the service lost $ 1.7 million in credit. That figure jumped to $ 5.4 million three months later. Between July 2019 and September 2019, he recorded credit losses worth $ 20 million.
Opera took the blame for this. “Given our focus on gaining scale,” said Jacobsen, “our credit losses are slightly up from last quarter’s revenue.”
Opera wants to solve this problem with an improved credit rating and more experience. Most importantly, the company has signaled that it will scale back its aggressive growth and expand “to more normalized levels than we have reported to date.”
Either way, OKash is looking to expand to more countries. Opera executives told investors it plans to expand its financial services between the next six months and the next 12 months. But they haven’t revealed where.