goeasy Ltd. , a leading full-service provider of goods and alternative financial services, announced today a $31.9 million transaction to acquire a consumer loan portfolio from Mogo Inc., which has a gross receivables balance of approximately $31.9 million and approximately 5,700 active customers, consisting of personal installment loans with terms of up to 5 years. In contemplation of the transaction, goeasy performed a thorough review and due diligence of the loan portfolio. The purchase will close effective today, Friday, February 28, 2020. The transaction also includes approximately $12.4 million of previously written off consumer loans and a commitment for Mogo to market and promote easyfinancial to its current and prospective members.
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In addition to acquiring the loan portfolio, the transaction will include a three-year lending partnership with Mogo after a successful five-month pilot that began in October 2019. Under this arrangement, goeasy will become Mogo’s exclusive provider of all non-prime consumer loans. Through the program customers that obtain non-prime loans within Mogo’s mobile app will have their loan funded by goeasy’s operating division, easyfinancial. To facilitate the loan transaction, the two companies have integrated technology to create a seamless customer experience and enable goeasy to approve and fund loans that meet its desired credit criteria. Mogo will receive compensation for loans funded by goeasy, in addition to volume-based incentive payments.
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“We are excited about our partnership with Mogo, one of Canada’s leading fintech platforms. The acquisition of this consumer loan portfolio, which resembles our core unsecured loan product with risk-based pricing, will help accelerate our growth and provide positive benefit to our 2020 earnings. The lending partnership also aligns to our strategy of expanding our acquisition channels by leveraging third party partnerships,” said Jason Mullins, goeasy’s President and CEO. “As we transition Mogo’s loan portfolio to easyfinancial, we look forward to building strong relationships with these customers and to offer them our full suite of financial products and services designed to help improve their credit and graduate to lower rates.”
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