OppFi Revenues Climb as Borrowers Seek Larger Loans

Personal lending platform OppFi recorded record quarterly revenue amid an uptick in loan sizes.

The company released earnings Wednesday (Aug. 6) showing revenue increasing 12.8% year over year to a record $142.4 million.

Meanwhile, OppFi’s Model 6 system managed 80% auto-approval rates while reducing net charge-offs.

“The significant improvements we’ve made in operations and credit have delivered another record quarter. Model 6 has continued to drive incremental origination growth while maintaining our risk standards,” Todd Schwartz, CEO and executive chairman of OppFi, said in a news release.

“We also achieved a record auto-approval percentage for the quarter while maintaining strong customer satisfaction of 79 NPS. As a result of this momentum, we are raising our full-year guidance for both revenue and adjusted net income.”

During the question-and-answer portion of the company’s earnings call, management was asked about the uptick in average loan size, with Schwartz saying that OppFi is “now able to incrementally … increase that up to closer to $5,000.”

Pamela Johnson, the firm’s chief financial officer, added that “our average loan size… has increased by about $100 for the year-over-year.”

PYMNTS spoke earlier this year with Schwartz about OppFi’s efforts to extend credit at a time when 67% of the American population lives paycheck to paycheck.

“The credit access issue has not been solved,” he told PYMNTS CEO Karen Webster, adding that there is a vicious cycle in the quest to create creditworthiness.

“If you’re not able to get a car or a home loan, how else do you build credit? It’s a real issue and it needs to be figured out.”

For many people denied traditional credit, buy now, pay later plans have helped, but the larger backdrop is these consumers often have made financial missteps, have dealt with medical emergencies or other life changes, or just don’t have a strong grasp of personal finance.

“It’s hard to rebuild your credit,” Schwartz said, “because to rebuild your credit you need more credit to prove yourself — so you’re already starting behind the eight ball … there are people who just don’t have credit because they have never applied for it or don’t use it. They rely more on debit cards and cash flow.”

OppFi, which aims to expand credit access through a platform connecting individuals with community bank partners and personal loans, focuses on borrowers who fall in the FICO range below the 650 mark, where traditional lending options run thin.

Borrowers must have regular sources of income and checking/savings accounts, with the company reporting repayment progress to the credit bureaus, which in turn helps customers expand their credit profiles while getting the funds they need.