Blue Finance took silver in the internal ranking of mid-sized companies in the Finnish fintech sector and was the largest company in its category, considering only comparable revenue.

 

Despite a difficult year, Blue Finance managed to improve its ranking

From last year’s third place, the company now reached second place in the internal ranking of mid-sized companies in the Finnish fintech sector. Based on comparable revenue in 2020, Blue Finance was the largest company in the scaleup category.

The listing was published by Helsinki Fintech Farm in August 2021 it is based on the latest statistics about the fintech sector in Finland.

The data collected by Helsinki Fintech Farm reveal that 2020 was a challenging year for the entire industry. In addition to the prevailing pandemic, the consumer credit business was negatively affected by the temporary 10% interest rate cap. Overall, the sector’s revenue decreased slightly from EUR 1.3 billion in the previous year, mainly due to the decline in the revenue of the largest companies affecting the sector.

“Once again, I am proud to say that despite an exceptional year, we have achieved excellent results compared to other players in the industry. We would not have achieved this without our top team. Digital solutions require top-level expertise and smooth collaboration, and this contributed to our excellent competitiveness”, says Lauri Lehtonen, CEO of Blue Finance.

 

Based on comparable revenue, Blue Finance is Finland’s largest fintech scaleup company

Blue Finance is ranked high in the Fintech Farm Helsinki scaleup listing. Scaleups are mid-sized companies that have been in business for 5-10 years. In the scaleup category, Blue Finance is the largest fintech company when only comparable revenue is considered. This is since revenue reported by UKKO.fi are not comparable, as it includes all salaries paid to its customers through the company’s website. Thus, a significant part of UKKO.fi’s revenue is margin-free sales, while for comparison purposes, Blue Finance Group’s revenue do not include similar margin-free sales.

 

Largest fintech scaleups in Finland 2020

Blue Finance Oy (Ltd) has expanded to Poland by establishing a new subsidiary, Blue Finance Polska. The subsidiary will provide consumer credit in Poland under the Nexu brand. The goal is for the operation in the future to also include corporate loans.

Blue Finance Oy has established a new subsidiary in Poland. Founded already in the spring of 2021 and providing consumer credit, Nexu.pl started operating in September by issuing a loan for its first customer in Poland.

“The new market will serve two purposes: Poland’s large consumer credit market will offer us an opportunity for a steady growth, but at the same time it also divides our risks within a specific country. There are many factors in Poland that allow for an efficient operating, such as established procedures, a clear legislation which is a result for the long history of market operation, good infrastructure, and good collaborators”, says the Chief Executive Officer for Blue Finance Group Lauri Lehtonen.

 

Consumer credits on the rise – Poland’s economy has recovered after the pandemic

With the digitalization of households, the non-banking consumer credit market has experienced a clear rise in Poland since the beginning of last decade, and the number of loans issued have risen significantly also in 2021. According to Poland’s Credit Information Bureau (BIK) the value of the loans issued rose 78.2 % in October when compared to last year, and the number of loans was 62.5 % more than the corresponding period of time in 2020. The most typical loan products in Poland are credit lines, fixed-term loans, and credit cards.

Compared to other EU countries, Poland has endured fewer damages during the COVID-19 pandemic both in terms of GDP and the employment. Before the pandemic, the country’s GDP had been growing for 27 years in a row, and the dip of 2020 (-2.7%) is now already behind. The projected economic growth for the current and the next year is at the estimated level of 5 percent. The special regulations for consumer credits set on account of the pandemic were lifted in 30.6.2021.

 

The inclusion of corporate loans next year

Blue Finance is entering the new and exciting market from a strong position by having 10 years of experience in the business. The goal for 2022, which will be the first full year of operation, will be redeeming start-up costs and breaking even with no profit or loss. Working to ensure that these goals are met is the motivated and capable team of Blue Finance Polska, who likewise have years of experience from the financial sector.

Poland’s large population of 45 million people offers possibilities for an extensive clientele which is the reason the operation is starting with consumer credit. The aim is to follow the example of Finland and Denmark and extend the operation during 2022 to include corporate loans. The market for small and medium corporations is approximately 119 billion euros, which is nearly double that of Finland’s.

”It is great to be able to start our operation in Poland. We have a good starting point for success: a motivated team and a market full of potential for growth. Our competitive advantage will absolutely be Blue Finance Group’s credit management platform AXON, which enables the use of big data in customer selection and controlling credit risk”, says the Country Manager of Blue Finance Polska Tomasz Zapala.

Broaden’s revenue and customer numbers have shown steady growth during 2021 and the credit loss rate has remained very low. Strongest growth was seen on the P&T financing side. Corporate lending was also launched in Denmark.

Corporate lending is still a small, yet rapidly growing part of Blue Finance’s business. The company’s performance during the report period (January-September 2021) was good and we successfully managed to double monthly revenue year on year. In addition, corporate lending has been profitable throughout operations. The quality of our loan portfolio is at a good level and the credit loss rate is very low.

All the corporate lending services provided by the company are up and running and our main focus is on growing the customer stream. Our credit products are currently secured B2B loans and P&T (Purchase and Trade) financing, an asset-based inventory financing product particularly intended for the vehicle trade.

During the report period, we rolled out Axon, the Group’s new credit management platform. This allows us to grant more and better managed loans and makes it easier to manage our growing customer base.

 

January – September 2021 overview

Revenue growth, €m

The figures for 2021 in this report have not been subject to audit. The figures in parentheses are the reference figures for the same period a year earlier.

• Revenue was €503,000 (€75,000), up 570%
• Operating profit was €227,000 (€34,000), equating to 45.1% of revenue

 

Strongest growth was seen in the company’s asset-based P&T financing, where both numbers of vehicles financed and customer flows have risen on a monthly basis. During 2021, we will provide P&T financing totalling €6 million.

We expect to see significant growth in secured corporate loans from the start of next year. Going forward, individual credit risks will be managed by keeping the average size of loans to an average of less than €20,000 and in principle by granting loans with a maturity of less than 24 months.

The readiness and ability of SMEs to grow have increased with the partial lifting of Covid-19 restrictions and this is clearly reflected in increased customer flow at Broaden. Our customers’ growing working capital requirement is reflected in greater demand for our corporate lending products.

 

Outlook

In 2021, we will reach lending of €6 million and next year expect to exceed €20 million.

We do not consider that the Covid-19 pandemic will have a major impact on our business going forward. No impact at all has been seen in P&T financing since the used car trade is currently in good shape in Finland.

Going forward, the new Axon platform will allow better risk management of corporate loans and minimum credit losses.

Based on feedback from customers and the interest triggered by our service concepts, we enter the rest of this year, and especially the upcoming 2022, on a positive note.

 

Broaden scalability in other countries

We have started rolling out the Broaden brand for use in the Group’s Danish subsidiary (broaden.dk) and the plan is still to begin B2B lending in Denmark in 2021.

Successful consumer credit in Denmark provides a good basis to also expect good results on the corporate lending side. The Danish SME market is around €91 billion, around 44% greater than the same market in Finland, which is around €63 billion. In addition to this, the Group’s business area also includes Poland, with an SME market of around €119 billion, almost double Finland’s.

We are implementing our profitable growth strategy by continuing to explore the potential to expand into new countries.

Now published half-year financial report for 2021 covers among other things the interest rate cap and the market regulations that were in effect in Finland between 1.7.2020-30.9.2021 and how they affected the consumer business, as well as how business activity in Denmark doubled compared to the same time period in 2020.

Read more about Blue Finance Group’s first half of 2021 from the report: English, Finnish

Blue Finance provides an encouraging working environment for students and recent graduates. Read the story of Sara, who found her ideal work in the field of financial services at Blue Finance, and how she was taken with the exciting atmosphere of the company.

Back in the spring of 2020 during the corona outbreak, Sara Ansaharju, 26, had an empty calendar for the summer. The global situation had brought Sara away from her business studies at Lund University in Sweden back to home surroundings in Turku, Finland.

”I was looking for a summer job and at the same time writing my bachelor’s thesis. There didn’t seem to be any jobs available in Turku where I could gain some experience in the financial services sector.”

However, Sara took notice of Blue Finance’s advertisement on an online recruiting service for a credit handler to join the Blue Finance Credit team. The advertisement mentioned an energetic and modern work environment, and Sara was sold.

“It all fell into place. Turku, financial services sector and a good team. Everything I wished for,” Sara expresses her feelings.

 

Finding new avenues through an ever-developing environment

Sara accepted the position of credit handler in the Credit team. Initially, her job included processing credit applications, making payment plans, and customer service. The momentum at Blue Finance is fast-paced and her job description evolved significantly during one year.

”It’s incredible how fast things changed with automation. Naturally, development work also shaped our team members’ job description, and quite soon credit application processing was one of the jobs automated. Through automation we were able to focus more and more on customer service and solving customers’ problems. All in all, development efforts made the work and working practices more efficient,” Sara explains.

 

Responsibility counterbalanced by flexibility and the support of a good team

Continuous changes call for flexibility and the ability to adapt to new situations.

”Things are changing really fast and adapting to new situations has become a day-to-day routine in our working life. I was positively surprised at how quickly I was given responsibility – and I gladly accepted it. I believe the experience will be very useful in the future.”

Blue Finance has given Sara a great foundation for success in the future.

”I now know in practice how a financial services company works and just how much goes on in the background. There’s far more to it than just granting credit.

Sara considers Blue Finance’s strength as being its quick responsiveness. Because everything is online, it’s possible to respond promptly to changes. However, it all comes down to competent and pleasant colleagues to make our credit team succeed.

”The atmosphere in our own team was always good and motivating and I’ll miss it. They are a great bunch of guys,” Sara says.

 

Providing valuable working life experience with a chance for personal improvement

Working in the Blue Finance Credit team is a great start for students and recent graduates who are interested in the financial services sector. Sara says that the company provides support, flexibility and a great team.

It’s ok to make mistakes, as long as you fix them and learn from them.

”You can do the job with a positive attitude, but it also requires accuracy and absolute reliability. Of course, you’ll be given good orientation to everything.

Even though Sara is a bit sad to leave Blue Finance, she is ambitious as she will give her last year of studies all her effort and dedication.

“This was a good experience as a student,” Sara says.

Going forward, Sara wants to remain in her current sector and look for more demanding work.

”Maybe at Blue Finance,” Sara says.

 

Blue Finance encourages training and supports the development of their employees.

“It’s entirely to our advantage when our employees train and learn something new. We’re pleased to be flexible so that work and studies collaborate suitably with each other. Although Sara now wants to focus on her studies, we hope we’ll see her again at Blue Finance,” says Marcus Ruokolahti, Credit Manager at Blue Finance.

The Danish FSA (Finanstilsynet) has granted a Consumer Finance License for Blue Finance Denmark. The entire Board of Directors and the executive management was also approved fit and proper.

The Danish regulatory framework is extremely strict in order to maintain a high level of confidence in the Danish financing market. The framework includes strict guidelines and recommendations on how the creditworthiness assessment must be conducted and also which 3rd party data sources must be used. Obtaining the consumer finance license is a milestone for Blue Finance Denmark although its granting was expected.

“We’re extremely happy to have been granted this license as one of the first Danish Consumer Lending Companies, as it shows that our company abides by the strict rules set by the Danish FSA. The license is an affirmation of our continuous work of striving to the highest standards in our field”, Nicolai Dam, Country Manager and CEO of Blue Finance Denmark says.

Blue Finance supports rigorous regulation, as it brings predictability to the often-volatile financing markets. The company finds it beneficial for the whole sector to have stable rules in place, ensuring that customers can rely on receiving only the best services available. Furthermore, it is a recognition of the effort Blue Finance puts into being a responsible and trustworthy company, that always carries out an in-dept assessment which ensures that the consumer has the financial capability to fulfill their obligations towards the credit agreement.

For both Blue Finance Denmark as well as the parent company Blue Finance Oy (Ltd), the Consumer Finance License confirms that the companies’ policies, procedures, and processes match the new, strict Danish legislation.

”Having obtained the license, we’re now dedicated to offering our services to our clients with the certainty that our work reaches a high level of compliance with the Danish regulatory framework”, Dam continues.

 

For more information:

Nicolai Dam
Country Manager & CEO
Blue Finance Denmark
nicolai.dam@bluefinancegroup.com

Blue Finance has launched a new operative brand, Broaden. In addition to corporate lending, Broaden, which specialises in B2B financing, provides P&T financing for vehicle dealers.

Broaden, which focuses on corporate lending, will expand Blue Finance’s range of services from consumer credit to B2B financing. Broaden is the new operative brand of Blue Finance’s subsidiary Blue Finance Corporate Lending Oy and provides both corporate lending and P&T (Purchase and Trade) financing.

The new brand was brought about by a desire to expand and grow Blue Finance’s existing range of credit services and the company’s operations in Finland. The decision to launch a new brand was driven by a need to differentiate corporate services from the parent company’s consumer credit services. A distinct B2B brand will mean an enhanced customer experience for Blue Finance and Broaden customers since products aimed at different target groups can be now found under their own brands.

“Customer focus drives our business also on the corporate lending side, where instead of just providing finance to our customers, we want to be their reliable partner. Unlike traditional brick and mortar banks, we have the flexibility to tailor our services to individual customers,” says Petteri Menna, CEO of Blue Finance Corporate Lending Oy.

 

P&T financing provides opportunities for business growth

In addition to corporate lending for SMEs, Broaden’s product portfolio also includes P&T financing, which allows vehicle dealers to finance large vehicle purchases.

“On the B2B financing side, visibility and the future of the market are full of opportunities. As far as future growth is concerned, the P&T financing product in particular looks promising: even though we have now focused especially on providing P&T financing for the vehicle trade, the product is easily scalable. Going forward, we will be able to take the same product to retail customers of boats, mobile machines, motorcycles and other vehicles,” Menna says.

 

Broaden creates new opportunities for Blue Finance Group investors

The new lending company gives the Blue Finance Group opportunities to create growth also outside of the heavily regulated consumer credit market. At Blue Finance Group, diversifying the business along new tracks is seen as a positive move.

“For us, the new B2B financing brand is a great opportunity to grow on the home market since it allows us to serve different customers with new types of products. Unbundling B2B financing into a separate brand also allows us to serve customers distinctly and purposefully under both brands,” says Lauri Lehtonen, Blue Finance Group founder and CEO.

 

Visit Broaden at Broaden.fi.

Blue Finance has appointed Petra Mengelt as the new Country Manager in charge of consumer operations in Finland. Mengelt, who took up the post of Country Manager in October 2020, wants to improve the consumer credit company’s customer experience offering and to invest in a meaningful and motivated workplace culture.

Petra Mengelt has been appointed Blue Finance’s Country Manager in charge of consumer operations in Finland. Mengelt, who took up the post in October 2020, wants to improve the customer experience that consumer credit operations provide and to invest in motivated workplace culture to ensure that Blue Finance is able to face the growing competition in the industry also in the future.

Before starting to work in the Fintech sector almost ten years ago, Mengelt’s previous experience comes from the international aerospace and metal industries. She has also worked as a management consultant gaining insight in successful management practices. Mengelt applies the ideas of the lean management concept in the development of management and operations, something she brings to the table from her time working in the international environment.

“I’m very excited that it is Mengelt that we have as Blue Finance’s Country Manager for Finland. She has had an interesting career, and she provides the company with a lot of valuable insight from other consumer credit companies as well as an understanding of how a fast-growing business is run. It’ll be great to see how Petra takes the business in Finland forward,” says Lauri Lehtonen, CEO of Blue Finance Group.

 

Mengelt seeks to drive growth through digitalisation and continuous development of operations

As the new country manager, Mengelt is especially passionate about developing Blue Finance’s customer experience. Improved digital services and smooth interaction guarantee continuous customer satisfaction.

“Investing in customer experience is a resource that has been ignored by the consumer credit industry. I want to see a huge change in this aspect. A good customer experience is the basis for more committed and long-lasting customer relationships,” says Mengelt.

The customer interface is being developed on the basis of customer feedback, for example. Digital services also allow for immediate response: automation and robotics are a big part of everyday customer service, leaving time to develop other activities.

“Efficient and communicative cooperation amongst employees enables us to continuously develop our products and procedures. We take customer feedback into account in all our activities. When we share a clear goal and objectives, we can measure the effectiveness of our operations. Then we are one step ahead of the others,” says Mengelt.

 

2020 also challenging for consumer credit companies

The consumer credit sector has undergone big changes over the past year: competition has intensified while some competitors have disappeared. The new act on the interest rate cap imposed by the Finnish government has also brought challenges to the sector that need to be addressed without delay. Despite all challenges, however, Blue Finance has been able to grow over the past 12 months: in addition to Finland, Denmark and Spain, the company is expanding its operations to Poland.

“Even though the company is growing, I want to nurture a sort of start-up atmosphere: the best decisions and the most interesting ideas come from working together, not from behind the management team’s closed doors. Employees are also more committed when they have a say on operations and how to improve them. They come up with some crazy ideas that, once further developed, benefit both our customers and our shareholders,” says Mengelt.

Blue Finance will continue to invest in multi-channel, clear and easily accessible consumer credit activities, top-of-the-range customer service and gaining customer trust. The company will make sure to guarantee both user-friendliness and the security of its digital services.