RESHAPING UNSECURED LENDING - Danie Du Toit - Pepkor
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RESHAPING UNSECURED LENDING
Danie Du Toit
CONTEXT
Ø Capfin historical structure:
• Loans funded by external party
• Pepkor supplied services through
• Southern View Finance SA (contact centre and credit)
• Van As and Associates (debt collection)
• Pep & Ackermans (loan applications)
Ø Pepkor will start funding Capfin loans from April 2019
• To assume complete control over customer credit experience,
and sustain Capfin’s profit contribution to Pepkor
• Capfin strategy and operations will remain unchanged
• Pepkor will also continue to collect on existing loan book
Ø This presentation is about the integrated Capfin business
Making your best life possible through a Capfin loan. Reshaping unsecured lending. Our customer-first approach is changing the story of unsecured lending in South Africa.
UNDERSTANDING OUR CUSTOMER
Ø Our typical customer is under pressure
• Lower end of the income spectrum (avg. R10.4k monthly)
• Working hard to move forward in life
Ø We help them by offering:
• Credit that they can afford
• Accessibility and ease
• Exceptional service
Sheldon - Resilient Survivalist
Ø Our loans are typically used for:
• Education
• Unforeseen expenses like funerals or car accidents “Thank you for the way you treated me on
your side, I will advertise Capfin always.”
• Durable products
• Regular household expenses in times of crisis - Capfin Customer
CAPFIN AT A GLANCE
Ø Company Ø Responsible lender
• Objective: profit through a healthy and growing • Regulated industry, regulated pricing
book of unsecured loans (not retail credit) • Track record of compliant and ethical lending practices
• 960 employees • We activate < 30% of new customer applications
• Very low volume of complaints (1 in 10 000 loans)
Ø Capfin Loans
• From R1 000 to R50 000
R4 800 average loan size
“What you say is what I get. Your word is you honour
• 3/6/12/24 months repayment terms and that what I like about your company it is one of
8 months average loan term the few in the country that doesn’t scam people
• 872 thousand loans activated p.a. therefore I keep on returning to the company.”
- Capfin Customer
Ø Debtor’s Book
• 325 thousand active customers
• R2.1 billion gross value
SIMPLE PROCESS
Loan Central Credit Proof of Loan Loan
Application Scoring Income Origination Disbursement
Retail Channel Custom Scorecards Document Channels Process Steps To bank account*
▪ Pep ▪ Application ▪ DEA 1. Affordability ▪ 12% same day
▪ Ackermans scorecard ▪ Retail scan 2. Offer ▪ 32% next day
▪ Other ▪ Behavioural ▪ Web upload 3. Contract
scorecard ▪ E-Mail
Mobile Channel Origination Platforms
▪ SMS ▪ Fax ▪ Call centre-based
▪ USSD Document Vetting ▪ Online self-service
Digital Channel ▪ Agent (call centre)
▪ Web direct ▪ Automated
▪ Digital lead partners
CAPABILITIES AND SCALE Ø Centralized operations • 1000-seat, award-winning contact centre • Centralized credit scoring and decisioning • Agile IT development, with team of approximately 100 • Located in single, custom facility in Kuilsrivier Ø Custom-developed IP • Bespoke customer segmentation model • Custom-built scorecards for short term unsecured lending • Advanced analytics and credit risk management Ø Strong culture and employee engagement
WE COMPETE TO WIN Ø Industry and competition • We compete with a wide range of credit providers, including banks • Highly competitive and regulated (NCA, DebiCheck, Popia) • Slow/negative growth in loan volume, increase in loan value Ø Leading market share for loans 2- to 24 months • Capfin 16% of loans activated (Finbond closest competitor) • Capfin 18% in value of loans activated (Capitec closest competitor) Ø Our focus and positioning • 100% focused on short-term, unsecured lending • Full service in all channels • Endorsed by trusted brands
OUR GROWTH STRATEGY
Ø Vision: Capfin Everywhere Gross Debtor's Book
2,5
Billions
Ø Growth drivers
• Credit – continue to evolve our offering 2,0
• Channels – expand our channels with a focus on digital
• Partners – add strategic distribution partners 1,5
• Brand – build a trusted brand
1,0
Ø How we win
• Exceptional service 0,5
• Trusted brand
• A great customer experience that caters to our target 0,0
market segments Oct - 2011 Oct - 2013 Oct - 2015 Oct - 2017
RECOGNITIONS Ø BPESA/CCMG Best Large Captive Contact Centre • Multiple winner (2015, 2016, 2018) Ø Sunday Times Top Brands 2018 • Winner in in category unsecured lending
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