Important Notice and Basis of Preparation

Jump to section

• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. Market Context and Opportunity
• 3. Regulatory Framework and NCR Registration
• 4. Products and Pricing
• 5. SWOT and Competitive Position
• 6. Credit Policy and Risk Management
• 7. Technology and Operations
• 8. Go-to-Market
• 9. Governance and Team
• 10. Financial Plan
• 11. Funding Structure and Capital
• 12. Break-Even and Credit Sensitivity
• 13. Sensitivity and Scenario Analysis
• 14. Risk Management
• 15. Implementation Roadmap
• 16. Investor Returns and Exit
• 17. Key Performance Indicators
• 18. Key Assumptions
• 19. Conclusion
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Unit Economics and Volume Schedules
• C. Appendix C: Funding and Debt Schedules
• D. Appendix D: NCR Registration Checklist
• E. Appendix E: Risk Register
• F. Appendix F: Glossary

This business plan has been prepared for XTXFX Financial Technologies South Africa (Pty) Ltd, a proposed digitally-originated, NCR-registered credit provider offering regulated short-term and unsecured personal credit to formally employed South Africans, in support of R45 million of seed equity and a Series A of approximately R85 million in Year 3.

Basis of the figures. The model is built bottom-up from loan volumes, product-level unit economics and the regulated fee structure. Revenue is recognised as the lifetime revenue of the loans disbursed in each year, credit losses on a cohort basis by vintage, and funding costs against the debt actually required to fund the book after available equity. The income statement, balance sheet and cash flow statement are fully articulated: the balance sheet is derived rather than plugged and balances to the rand in every year, and the closing cash position reconciles exactly to the cash flow statement.

Credit losses. The loss rate is calculated from the product mix in each year — Flex at a 13.0 per cent mature write-off and Term at 10.5 per cent, weighted by value — multiplied by vintage factors of 1.35 in Year 1 and 1.15 in Year 2 to reflect scorecard immaturity. On that consistent basis the rate falls from 16.5 per cent of disbursements to 11.6 per cent, rather than to 10.7 per cent. The Year 4 and Year 5 charges are consequently R41.2 million and R55.6 million.

Depreciation. The R6.5 million technology platform is depreciated over five years and presented as a line item. Its omission is why an income statement can otherwise show an EBITDA figure that does not reconcile to profit after tax.

EBITDA. Interest expense is a cost of funding the loan book rather than a financing item below the operating line, but it is presented separately here so that EBITDA means what it says. The plan shows EBITDA, then depreciation, then interest expense, then tax.

Debt and interest expense. Senior debt is drawn to fund the loan book after available equity, subject to a R5 million minimum cash balance, and priced at 14.0 per cent. Interest is charged on the average balance. The facility peaks at R131.5 million in Year 5 and falls to R10.2 million in Year 3 when the Series A is received.

Taxation. South African corporate income tax is applied at 27 per cent, with assessed losses carried forward subject to the section 20 limitation capping the set-off at the higher of R1 million or 80 per cent of taxable income. Losses from Years 1 and 2 shelter Year 3 entirely and are exhausted during Year 5.

Regulatory and market data. Interest and fee caps, the registration threshold and the compliance stack are drawn from the National Credit Act, its regulations and published NCR material current to 2026. Credit market statistics are indicative of published bureau and NCR reporting. Volumes, loss rates, acquisition costs and cost to serve are modelled and must be replaced with observed performance as vintages mature.

Confidentiality. This document is delivered in confidence to the named recipient. It may not be reproduced or circulated in whole or in part without prior written consent.

Contents

1. Executive Summary 4

2. Market Context and Opportunity 7

3. Regulatory Framework and NCR Registration 9

4. Products and Pricing 12

5. SWOT and Competitive Position 15

6. Credit Policy and Risk Management 17

7. Technology and Operations 19

8. Go-to-Market 21

9. Governance and Team 23

10 Financial Plan 25

11 Funding Structure and Capital 30

12 Break-Even and Credit Sensitivity 33

13 Sensitivity and Scenario Analysis 35

14 Risk Management 38

15 Implementation Roadmap 41

16 Investor Returns and Exit 44

17 Key Performance Indicators 46

18 Key Assumptions 47

19 Conclusion 49

A. Appendix A — Consolidated Financial Summary 50

B. Appendix B — Unit Economics and Volume Schedules 51

C. Appendix C — Funding and Debt Schedules 53

D. Appendix D — NCR Registration Checklist 54

E. Appendix E — Risk Register 55

F. Appendix F — Glossary 57