Nexora Capital — AI Underwriting & Credit Risk Framework
The decisioning architecture, the portfolio risk parameters and the collections and recovery framework underpinning Nexora.
Section 14 · Business Plan
AI Underwriting & Credit Risk Framework
The decisioning architecture, the portfolio risk parameters and the collections and recovery framework underpinning Nexora.
The credit engine is the plan’s load-bearing wall: as quantified in
the sensitivity analysis, a 150bps deterioration in cost of risk erases
nearly two-thirds of FY2031 profit. The framework is therefore presented
at credit-committee depth rather than as a technology narrative.
Decisioning Architecture
Underwriting consumes four consented data classes, bank transaction
history, POS/commerce flows, accounting-ledger data and payment
behaviour on the Nexora platform itself, and produces a
probability-of-default score, an affordability-tested limit and a
dynamic pricing tier. Decisions up to R250,000 are fully automated;
R250,000 to R1m receive automated decisions with analyst review of
exceptions; above R1m a credit analyst decisions with model support.
Models are challenger-champion tested, monitored monthly for drift and
governed by a model-risk policy approved at board level.
Portfolio Risk Parameters
| Parameter | FY2027 | FY2029 | FY2031 | Basis |
|---|---|---|---|---|
| NPL ratio (gross) | 6.5% | 5.2% | 4.6% | New-book seasoning curve; SA unsecured SME benchmarks 4–8% |
| IFRS 9 ECL coverage | 5.5% | 5.0% | 4.6% | Stage-weighted coverage of gross advances |
| Annual cost of risk | ≈5.5% | ≈4.5% | ≈4.0% | Charged within sponsor EBITDA (operating posture) |
| Weighted average tenor | 5 mths | 7 mths | 9 mths | Short tenor = fast feedback loop for models |
| Max single obligor | 1.0% | 1.0% | 1.0% | Warehouse eligibility criterion |
Collections & Recovery
Collections are engineered into product design: repayments sweep
daily or weekly against inflows rather than month-end debit orders,
smart repayment optimisation times collections to observed inflow
patterns, and early-warning health scores trigger pre-delinquency
restructuring conversations. Recovery on written-off exposure is
conservatively assumed at 15%, with proceeds recognised only on
receipt.
years
A book growing 3.7x (FY2028) and 2.7x (FY2029) is dominated by
unseasoned vintages whose true loss rates are not yet observable.
Reported NPL ratios during hypergrowth mechanically understate
through-the-cycle losses because the denominator grows faster than
defaults emerge. The warehouse structure addresses this with
vintage-level triggers and an excess-spread trap, and the model’s ECL
coverage is held above the NPL ratio in early years for exactly this
reason.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Nexora Capital (Pty) Ltd.