Zaim Credit System PLC (LON:ZAIM) , the Russia-focused microfinance group, is set for a rapid increase in profitability now that it has passed net even breaking point, according to a note from Italian research group ValueTrack.


Covid-19 has driven the microfinance business online and accelerated Russian “digitalisation” says ValueTrack.


While the impact of COVID-19 means the microfinance market will remain stable year-on-year in 2020, online expansion will grow the business at an annual rate of 20-25% in 2021E-22E, said the note.


Zaim’s online loans represented 59% of the portfolio in September 2020 compared to just 3% in October 2019 and this repositioning should drive further improvements going forward, says ValueTrack.


A net loss of GBP0.3mn in 2020 this year should swing to a profit of GBP2.7mln in 2021 and GBP7.8mln in 2022E, says ValueTrack, which has a fair value estimate of 6.75p per share against 6.5p previously.


Zaim’s shares were changing hands at 2.6p tpday.

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