For a company such as Affirm, with its business built on buy now, pay later (BNPL) offerings, the looming fintech recession is an incredibly risky prospect. With inflation continuing to grow in several important sectors, offering a great deal of credit to unproven borrowers can quickly turn disastrous.
As far as Affirm’s Chief Executive Officer Max Levchin is concerned, though, this challenge is the greatest opportunity his company has ever been presented. In fact, even though increased regulation from the Consumer Financial Protection Bureau and other government agencies is continuing to put pressure on BNPL firms, Levchin is more convinced than ever that his company’s underwriting will weather this storm and end up stronger than ever.
As he put the situation in an interview with The Wall Street Journal earlier this summer, “I can swear on a stack of Bibles or your preferred book of choice, until we get through a full recession, I will get partial credit when I show the numbers that I said I will. But once we're back in a rapidly expanding economy and we're still here, still lending money, still controlling our delinquencies, I think I'll get full recognition.”
The stakes are undeniably high for the decade-old digital lender. With stock prices that have plummeted since last year and a valuation down more than $36 billion since its peak, Affirm has its work cut out for it.