Debt management company Credit Intelligence (ASX: CI1) is broadening its service lifecycle by entering the SME financing sector through a 60% investment in financial services company YOZO Finance.
The investment will enable Credit Intelligence to increase its exposure to the financial services sector, specifically lending, where their primary operations currently focus on debt management and personal insolvency. In acquiring the majority stakes of YOZO, Credit Intelligence will have access to information from YOZO and their SME-focused business loan services that incorporate artificial intelligence to risk management.
“This is a fantastic opportunity for us to dramatically increase our revenue generation and diversify our revenue streams by integrating new financial products to capture more of the SME market,” said Credit Intelligence Executive Director, Jimmy Wang.
“By Integrating YOZO’s AI platform we can fully digitise our entire offering for more efficient processes where we can build a database and up sell our suite of products to new customers. We now offer a comprehensive full service offering with a specifically designed product to meet the needs of all SMEs.”
As part of their investment in YOZO, Credit Intelligence will work with the vendors to develop their SME-focused buy-now-pay-later service in 2021. The product named YOZO Pay will function like common BNPL services with four interest-free repayments but also create commercial opportunities for Credit Intelligence’s other business divisions.
Built in collaboration with Dr Guangdong Xu, the Director at School of Computer Science & Advanced Analytics Institute at UTS, YOZO was developed in 2019 specifically for SME’s that were unable to secure business loans due to low credit scores, payment dishonours and poor account keeping.
Total consideration for the 60% stake will see Credit Intelligence pay $690k in cash and $690k in CI1 shares that will be held in escrow for 6 months but may be released early in CI1 shares trade above $0.04 for five consecutive days.
Financials of YOZO Finance or its loan book size were not disclosed.