Italy's AideXa boosts capital as lending grows strongly
Reuters
Published Jun 06, 2023 10:33
MILAN (Reuters) - Italian digital lender AideXa has completed a 20 million euro ($21 million) capital raise from shareholders as lending to the small businesses it targets grows strongly amid a wider credit squeeze, it said on Tuesday.
AideXa, founded by veteran former UniCredit (LON:0RLS) executives Roberto Nicastro and Federico Sforza, said it had granted 400 million euros ($428 million) to small Italian businesses so far, with an average loan size of less than 200,000 euros.
Such small loans do not make economic sense for traditional lenders so AideXa uses a proprietary credit-scoring algorithm to select the soundest among companies that are too small to be served by high street banks.
Like other digital banks AideXa is more exposed than traditional commercial lenders to higher funding costs as official rates rise.
"New lending is growing at an annual 70% rate for us. This rapid pace of growth, which other fintech lenders are also recording, is good news because it allows us to offset higher funding costs than traditional banks," Nicastro told Reuters.
"We do pay more than high street banks for liquidity but as digital branchless bank we have a more efficient business model and we're pricing our loans accordingly," he added.
AideXa said its core capital would rise above 35% following the capital raise.
Three quarters of its loans are covered by state guarantees it said, adding that performing loans considered at risk, so called 'Stage 2' loans, together with gross impaired loans accounted for 6.9% of total lending. ($1 = 0.9338 euros)
($1 = 0.9348 euros)
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.