Right Choice Capital CEO and founder Kodi Kodrowski
Right Choice Capital Group, a Singapore-based provider of SME and consumer lending, remittances, payments, and wallet services, recently announced its FY2024 revenue surged over 100 per cent.
Started as a small lending business in the Philippines, RCC has grown into a diversified financial services group with four business units across Singapore and the Philippines, six office branches, over 100 employees, and multiple revenue streams. Since its inception eight years ago, the firm has raised over US$22 million in funding from private investors.
The group recently announced that it achieved 114 per cent y-o-y revenue growth and crossed the SGD10 (US$7.4) million revenue threshold while maintaining EBITDA (SGD3.4 million or US$2.5 million) and net income. All its business units grew steadily during this period, including Right Choice Finance Corp, Right Choice Payments, the Rural Bank of San Luis, Right Choice Kapital, and RCC-Tech.
Right Choice Capital’s CEO and founder, Kodi Kodrowski, spoke with e27 about the growth and its diversification and expansion plans.
Edited excerpts from the interview:
Can you share insights into the key drivers behind this exceptional performance for Right Choice Capital Group?
Two business units have had an outstanding performance during FY2024.
Firstly, our newly established Singapore SME financial services consulting business, Right Choice Kapital (RCK), did exceptionally well in its first full year of operations, generating over 25 per cent of group revenue. RCK provides consulting services and loans in a substantial market niche related to SME and small company funding. The SME funding gap in Singapore is estimated to be more than US$10 billion per year.
Also Read: Right Choice Capital gets nod to acquire Filipino rural bank, in talks for US$10M funding
RCK provides strategic guidance, tailored finance solutions, and access to essential resources. This has led to a successful start for the business unit and the ability to quickly ramp up the business and turn it into a profitable operation and margin contributor in year one.
RCC Tech was the other successful business unit within the group during the last financial year. It provides technology services to a broad range of external customers, serving some of the largest BPOs in the Philippines.
Starting as our internal technology provider, it has now expanded into a fully-fledged and profitable business unit.
How has each of RCC’s business units contributed to the significant revenue growth, particularly highlighting the performance of Right Choice Finance Corp, Right Choice Payments, and the Rural Bank of San Luis?
Right Choice Finance in the Philippines continued to provide loans primarily to SMEs and consumers via our earned wage access and salary loan products. Essentially, it operates in a very large, underbanked, and underserved lending market in the Philippines, where existing players are unable to meet the growing borrower demand. This business also has a strong ESG and social impact aspect.
Right Choice Payments has also continued on its steady path of providing international payment services to Singaporean customers who need to efficiently and cost-effectively send funds overseas to its 12 main remittances “corridors.”
Finally, the full acquisition process for the Rural Bank of San Luis will be completed in 2024, providing the group with a fully licensed banking operation that complements its lending operations, a deposit-taking capability, and digitised and streamlined banking operations.
How does RCC ensure sustainable lending business performance through prudent loan underwriting and portfolio management, especially across different markets such as Singapore and the Philippines?
Right Choice Capital ensures sustainable lending business performance through prudent loan underwriting and portfolio management practices tailored to the specific characteristics of each market, including Singapore and the Philippines. It achieves this by using comprehensive risk assessment and due diligence, risk-based pricing, diversification across industries, regions, and borrower profiles, adherence to regulatory standards, proactive portfolio monitoring and management, and stress testing and scenario analysis.
What are the key areas of focus for RCC in terms of pushing boundaries, pursuing innovation, and creating value for stakeholders moving forward?
Technology and digital innovation: RCC will continue to invest in technology and digital innovation to enhance operational efficiency, improve customer experience, and drive business growth.
Product development and differentiation: RCC will continue to focus on developing innovative financial products and services that meet clients’ evolving needs and differentiate the company in the market.
Market expansion and diversification: RCC will explore opportunities for market expansion and diversification, both geographically and across different industry sectors.
Client-centric approach: RCC will deliver exceptional value and service to clients through a client-centric approach. By putting clients at the centre of everything RCC does, the company aims to foster long-term relationships, loyalty, and trust.
Risk management and compliance: RCC will prioritise risk management and compliance to safeguard the interests of stakeholders and ensure the integrity and stability of its operations.
Talent development and culture: RCC will continue to invest in talent development and culture to build on our existing culture of innovation, collaboration, and excellence within the organisation.
Can you provide more information about Right Choice Capital’s investment track record and the opportunities it offers for both fixed-term private debt investments and equity investments in its Series A Funding round?
RCC’s investment track record is solid. Approximately S$30 million (over US$22 million) has already been invested in the business, and S$18 million has been disbursed in interest and principal repayments to its investors.
Also Read: Unlocking the future of lending with risk-based pricing
Based on recent solid growth and strong base business, the RCC group continues to be an attractive investment proposition, particularly for accredited private debt investors seeking fixed investment terms with relatively high yields (up to 19 per cent). The private debt investment funds offer liquidity to lending portfolios to service the continuing borrower demand in the Philippines and Singapore.
In addition to continually raising private debt funding for loan portfolio liquidity, we are also seeking to raise US$20 million in Series A equity funding as growth capital to increase our stake in the Philippines Bank, digitise the bank, grow all business units, and for general working capital.
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