Scaling Credit Safely: How Risk and Growth Can Coexist

For many financial services companies, lending is the next big step. Payments, deposits, and other services create a strong base, but credit creates a large, profitable business. The challenge? Well, it’s credit. Not just another product feature, a mismanaged credit product can sink a business.

One solution is to move very slowly, but that has its own costs: wasted runway, time, and opportunity. At Ensemblex, we know that credit and fast growth are compatible under disciplined, experienced leadership. Take as proof our recent partnership with a Series B financial services company. Their core product was payments, but they saw lending as an opportunity to deepen customer relationships and expand revenue. Leadership recognized the unique challenges and risks associated with lending and sought out expert help. Being involved early on gave us the opportunity to build a solid foundation, and six months later, the results speak for themselves:

• 2x portfolio growth, with a clear roadmap to double again in the near term.

• Risk indicators improving—delinquencies down, roll rates trending better, and cash-on-cash returns moving up.

• Standardized processes and policies are in place. Their lending operation is a well-oiled machine, ready for growth.

• Line of sight to profitability, with lending on track to become a major contributor to the business model.

So what does a disciplined approach to growth look like? Key areas we worked on included:

• Choosing “lighthouses”: In the early days of a credit product, it’s hard not to get pulled in a bunch of different directions. Credit teams, overwhelmed by scattered analysis and too many goals, often lose sight of their path to profitability or worse, miss warning signs of growing risk. We organized the team around a handful of credit KPIs—e.g., early delinquency, roll rates, and cash-on-cash returns—that act as the “lighthouses”, outlining a safe, focused path.

• Structured learning agenda: On the same theme of staying focused, we narrowed down their goals to the absolutely necessary ones, then designed tests that delivered actionable insights. Rather than experimenting broadly, they adopted a disciplined approach: test, learn, refine, act. It’s a straightforward but powerful practice, and too often it isn’t prioritized.

• Smarter use of data: The company already had rich internal transaction data. We made sure they leveraged that well, and layered in external (“off-us”) data sources. By combining the two, they identified strong customers who would otherwise be overlooked.

• Reevaluating legacy barriers: Early lending pilots had introduced “knockout” rules that eliminated too many low-risk customers. We guided them through a review of legacy rules, ensuring they didn’t unnecessarily constrain growth.

• Framing credit as a lever for growth: We helped the client think beyond simple approve/decline decisions and to use credit as a “carrot”. Credit lines were used strategically, increasing exposure for segments that could responsibly borrow more. At the same time, credit-led acquisition became a tool to bring in valuable new customers.

It’s possible to grow fast and build a resilient portfolio. At Ensemblex, we help companies achieve just that.