Ashot Torosyan has been working in the financial industry for 14 years, taking various leadership positions in international banks and fintech companies. For the last two years, Ashot has been leading TWINO Russia – the largest lending market of the TWINO Group.

TWINO’s Russian lending operations were launched back in 2013 and are currently issuing around €10 million with thousands of monthly active users. TWINO’s investors have funded nearly €219 million worth of loans from Russia since 2016.

How has the Russian lending sector been faring one year into the COVID-19 pandemic? In this interview, Ashot Torosyan shares his observations about the industry in general and reveals the future plans of TWINO’s Russian branch.

Natural selection within the Russian microfinance industry

The Russian microfinance industry seems to have passed the lowest point induced by the COVID-19 pandemic and recovered its overall performance since 2020. This year brought changes to all sub-industries and domains of fintech, and not always for the worse. While there has been a 23% reduction in the number of fintech companies, the strongest ones are still standing and even returning to pre-pandemic levels of operation.

Ashot Torosyan points out: “The lending market has become more consolidated since 2020, providing the largest companies with even more competitiveness. This has been accompanied by the natural outflow of companies. If there were over 1.7 thousand microfinance organizations at the beginning of 2020, only around 1.3 thousand remained at the end of the year.”

“Despite the restrictive measures taken by the government during the peak of the pandemic last year (e.g., reducing the limit for the total credit cost, allowing clients to postpone any payments by 6 months, etc.), the overall sales, as well as non-performing loan (NPL) numbers returned to their average levels,” Ashot adds.

Market-wide regulation to support fintech

During the 2020 turmoil, the industry faced several legislative adjustments aimed at mitigating the population’s debt burden and making lenders more responsible. Ashot adds: “The market is well regulated, and the Central Bank of Russia (CBR) is vigilant of unfair practices employed by lenders. We expect this to continue in 2021 with some potential adjustments in legislation related to client creditworthiness evaluation.”

CBR has launched a market-wide project to support microfinance companies in accessing various state databases and obtaining the so-called client’s digital profile. “This is an industry-changing project which we expect will be adopted by the majority of the microfinance market within the next two years. TWINO has already expressed its willingness to participate in this project in the second half of the year,” Ashot points out.

2021 comes with ambitious goals

Despite a very challenging year spent in the shadow of the pandemic, TWINO Russia managed to improve its bottom line and stay among the top 5 microfinance organizations in the country in terms of sales volume. For this reason, 2021 looks stable and even optimistic.

Ashot reveals: “The overall TWINO Russia performance is in line with our expectations. We followed a prudent approach balancing quantity, quality, and costs, to make sure we maximize the profit of every loan sold.”

This year the company expects to see substantial sales growth along with well-managed NPL levels, piloting installment products and bringing new features to the clients. This goes along with continuously ensuring an excellent service quality, which is one of TWINO’s core principles.

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