IEG Holdings Corp. (OTCQX: IEGH) is a provider of unsecured consumer loans in 17 U.S. states through its state licensed operating subsidiary, Investment Evolution Corporation, under the consumer brand ‘Mr. Amazing Loans’. In recent months, IEGH has successfully leveraged the increasing marketability of its consumer brand to promote tremendous growth, achieving a record high in monthly loan volume of $1.13 million in May before announcing a record high in daily loan volume of $150,000 in early June. In July, the company built on this progress, surpassing $13 million in cumulative loan volume. This milestone marked an increase of 140 percent from January 2015, which IEGH’s management attributed to growing recognition of the ‘Mr. Amazing Loans’ brand, low cost lead sources and continued state license expansion.
After announcing second quarter fiscal results that included a 19 percent year-over-year increase in revenue to a record high of $535,356, IEGH gave prospective shareholders some additional insight into the company’s growth strategy for the coming months. IEGH’s management team aims to expand the ‘Mr. Amazing Loans’ brand into 25 U.S. states during 2016, bringing total nationwide coverage to approximately 240 million people, or about 75 percent of the population. To strengthen its cash position ahead of this growth initiative, the company is currently in the midst of a $95.32 million rights offering to its shareholders of record, with plans to use the proceeds stemming from the offering to fund new loan originations and general corporate expenditures. The subscription period related to this offering is underway and set to end on August 29.
Looking ahead, IEGH’s management team expects loan volumes to continue to rise as a result of tightening regulations on the P2P lending sector. Paul Mathieson, chief executive officer of IEGH, reaffirmed this outlook in a recent news release.
“Management believes the substantially increased regulatory and financing scrutiny on the P2P lending sector is a significant positive going forward for the Mr. Amazing Loans business,” he stated. “IEGH is not a P2P lender, however, we expect some of the P2P players will implode, leading to less overall consumer loan provider competition. We anticipate that this will result in cheaper customer acquisition costs for online, state regulated, balance sheet lenders with strong underwriting standards such as IEGH.”
In June 2016, the New York Department of Financial Services issued warning letters to 28 P2P lending agencies as part of an ongoing investigation into the potential adoption of additional regulation measures. The correspondence demanded ‘immediate compliance’ with the state’s licensing requirements for debt collection, transmitting money and mortgage lending activity. This investigation follows a 2008 decision by the Securities and Exchange Commission that required P2P lenders to register their offerings as securities, pursuant to the Securities Act of 1933. The result was the introduction of an arduous registration process to the P2P sector that led a number of lenders to exit the U.S. market. Notably, New York is one of the eight states being targeted by IEGH for expansion in 2016.
For more information, visit www.InvestmentEvolution.com
