Vietnamese microfinance company F88 reversed its 2023 loss with a 31 billion dong ($1.2 million) net profit in Q1 2024. The company reported a 528 billion dong ($20.7 million) loss last year.
In Q1 this year, the firm recorded the highest revenue growth rate since the start of 2023, exceeding the original target by 6%, F88 said in a statement.
The company claimed its new users increased by 9% in the quarter.
F88 said a focus on quality loans, more stringent risk management, and better debt collection processes resulted in an improvement in net write-offs, which declined 46% year-on-year.
Other structural changes led to an 8% decrease in cost to income ratio (CIR) and another 3% increase in revenue per employee.
F88 also raised 191 billion dong in bonds during the quarter.
In March, the company introduced a new secured-lending package designed specifically for women-led micro and small-sized enterprises in Vietnam.
As of the end of March, F88 had 813 branches across the country.
Last September, the company secured a $50-million loan from Lending Ark Asia, bringing the total fundraising from the Hong Kong-based private debt business to $100 million. It earlier bagged $50 million in a Series C round from Vietnam-Oman Investment Fund and its earlier backer Mekong Capital.
Mekong Capital first invested in F88 in 2017 through its third fund in the Mekong Enterprise Fund series. Its next vehicle continued to back the financial services portfolio company.
Other equity and debt investors in F88 include Dublin-based investment firm Granite Oak and Lendable.
F88’s founder Tuan Phung earlier told Bloomberg that the company plans an IPO in 2024, seeking a valuation of $1 billion.
In March 2023, some F88 shops were found overcharging clients with extra fees, and online newspaper VnExpress reported the company had used “extortion” methods in debt collection.
Founded in 2013 and originally operated as a pawnshop chain, F88 initially claimed to make the traditional pawn services market, which is considered as a risky space to venture into, more transparent.