Nexora Capital — Risk Analysis & Mitigation
A structured risk register and the mitigation measures covering credit, funding, regulatory, technology, operational and market risks.
Section 28 · Business Plan
Risk Analysis & Mitigation
A structured risk register and the mitigation measures covering credit, funding, regulatory, technology, operational and market risks.
| Risk | L | I | Mitigation |
|---|---|---|---|
| SME credit defaults above model | M | H | Challenger-champion model governance; daily-sweep collections; vintage triggers; ECL coverage above NPL in ramp years |
| First-loss/Series B not raised at M40 | M | H | Early investor pipeline; book growth throttle as fallback (caps book ≈R4.1bn); mezzanine alternative |
| Warehouse tranche 1 delayed | M | H | Dual-track two providers from M6; DFI credit lines as alternative senior |
| Competitive response (Lula, TymeBank) | H | M | Ecosystem breadth; partnership-locked distribution; downside scenario priced |
| Regulatory change (NCA caps, licensing) | M | M | Dedicated compliance function; diversification to fee revenue; staged licence strategy |
| Fraud losses | M | M | ML fraud engine on payment flows; PCI-DSS perimeter; fraud losses within cost of risk |
| Sponsor-bank/BaaS dependency | M | M | Dual-track providers; contractual portability of accounts; own-licence option Y5+ |
| Funding-rate rises (JIBAR +100bps = −R44m PAT) | M | M | Rate caps/fixes above R1.5bn book; margin step-downs on seasoning |
| Key-person / hiring slippage | M | M | Retained search pre-close; ESOP; interim fractional executives |
| Economic slowdown hits SME base | M | M | Sector concentration limits; short tenor book re-prices fast; counter-cyclical demand for working capital |
| Cyber / data breach | L | H | Bank-grade security architecture; POPIA programme; insured; annual penetration testing |
| FX & regional execution (Phase 2–3) | M | M | Partnership-led entry; entry gated on Phase-2 economics; natural hedging of local books |
L = likelihood, I = impact (H/M/L). The register is maintained live
at board level with quarterly re-scoring. The three risks that would
individually break the plan, credit performance, the M40 raise and
warehouse execution, are exactly the three findings surfaced in the
executive summary, which is deliberate: the document’s honesty about
them is itself the first mitigation, because it prices them into the
terms rather than discovering them in covenant breach.
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.