Credit losses exceed assumptions

High in early vintages

Very High — a 2.0 point deterioration removes R20.8m of Year 5 profit against a base of R16.0m, and break-even sits only 3.7 points above the base case

Conservative initial cut-offs; small first-vintage exposure via Flex; monthly vintage review by channel and score band; pre-agreed policy tightening triggers; growth taps closable within one origination cycle

Chief Credit Officer

Origination while unregistered

Low

Catastrophic — section 89(2)(d) renders the agreement unlawful and a court must declare it void, leaving only an enrichment-based restitution claim

Registration before any commercial activity; the NCR certificate is the first gate in the implementation roadmap and no origination journey is enabled before it

Compliance Officer

Pricing above the section 103 ceiling

Low

Catastrophic — unlawful conduct that the Tribunal can meet by declaring the agreement unlawful, leaving the lender with principal only

Caps enforced in the lending ledger in code rather than by policy; Term priced 1.85 points inside the ceiling so a repo cut does not push the book offside; monthly review against the gazetted repo

Compliance Officer

Affordability assessment failure at scale

Low to moderate

Very High — a reckless credit finding can suspend agreements or set aside consumers’ obligations across a cohort

Verified bank transaction data as the evidentiary backbone; full decision logging of every input, rule and score; internal buffer below the regulatory maximum instalment; annual independent compliance review

Compliance Officer

Prescribed fees remain frozen in nominal terms

High

Moderate and cumulative — roughly half of revenue erodes in real terms every year with no relief assumed

Grow average loan size within affordability limits; drive cost to serve down faster than fee value erodes, from R1 679 to R400 per loan across the plan

Chief Executive

Origination volume shortfall

Moderate

High — a 10% revenue shortfall costs R10.1m of Year 5 profit

Diversified channel mix with capped aggregator share; employer partnerships from Year 2; repeat lending reaching 72% of originations by Year 5

Chief Executive

Volume shortfall causing cut-off loosening

Moderate

Very High — the compound scenario produces a Year 5 loss of R11.2m

Credit committee holds cut-off authority independent of the commercial function; exception rates measured and reported to the board monthly

Chief Credit Officer

Funding withdrawal

Moderate

High — growth halts and the book runs off

Diversified facility providers; covenant headroom maintained well inside limits; the book self-liquidates within fifteen months so an origination freeze converts it to cash quickly

Chief Executive

Interest rate increases

Moderate

Moderate — a 300 basis point movement costs R2.2m

The NCA ceiling rises with repo, so pricing headroom widens as funding costs rise and the two partially offset. Residual exposure is timing on the existing book

Chief Executive

Macroeconomic deterioration

Moderate

High — presents as credit loss

Target segment is formally employed with verified salary deposits; employer concentration limits applied; sector concentration monitored monthly

Chief Credit Officer

Fraud and identity theft

Moderate

Moderate — presents as credit loss and corrupts the scorecard if not separated

Device and behavioural fingerprinting; Home Affairs verification; bank account ownership validation; shared fraud databases; first-payment-default monitoring by channel

Chief Technology Officer

Key person dependency

Moderate

Moderate

Documented credit policy; dual-approval governance; key person insurance; no single individual able to override the decision engine

Board