Linking unlinked data

South African Credit Arena

4 815 Credit Providers

2 023 Debt Counsellors14 803 Debt Collectors

# accounts 79.42m

14 Credit Bureaux

22.12 m Credit active consumers

14.9 m unemployed

3.3m individuals paying 99% of tax

15.6m social grants recipients

14.9m workers

46m consumers on average on Credit Bureau

NCR Credit standing

Amnesty removals

Amnesty removals

NCR Credit standing

NCR Credit standing

NCR Credit standing

NCR Consumer impairment

NCR Enquiries origin

NCR Enquiries origin

Full picture?

Credit vs Non Credit accounts

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

2011

Q2

2011

Q3

2011

Q4

2012

Q1

2012

Q2

2012

Q3

0

10

20

30

40

50

60

70

80

% Credit accounts % Non-credit accounts

This is an example text. Go ahead and replace it with your own text. It is meant to give you a feeling of how the designs looks including text.Tracking Credit and Debt data

Category Q endJun 2007

Q endDec 2013

Q end Jun 2014

NCA CR Active Cons 16.78 m 20.64 m 22.12 m

NCA Accounts 52.06 m 73.18 m 79.42 m

NCA Enquiries 104.73 m 348,66 m 365.76 m

NCA Total Credit R 102 370 b R 117 213 b R107 190 b

NCA Impaired 11.36 m 19.74 m 19.27 m

NCA Debt book R1 025 884 t R 1 520 031 t R 1 568 991 t

Municipal Debt ’05 R27 700 b ’10 R56 400 b ’13 R 93 000 b

Current consumers on Credit Bureaux 46.13 m

Municipal Debt

DURBAN - KwaZulu-Natal municipalities face having to write off at least R1.6 billion owed to them, the SA Local Government Association said on Tuesday.Thursday 14 November 2013 - 3:01pm

IMFO: Municipal debt – Rev sources

Municipal Debt Profile

Municipal Debt Profile

Current Municipal Debt in South Africa

R93 billion!

Municipal Collection challenges

• 100% collection impossible due to:- Poor consumers- Liquidations- Insolvencies- Political moratoriums- Data integrity and incorrect billing- Insufficient and insignificant bad debt write-off- Interest on debts (both recoverable and irrecoverable)

etc - Poor service by some municipalities

Credit Bureau Data Sources

Credit Bureau

Credit providers

Telcos

Insurers

Subscribers

Courts

Home Affairs Deeds

office

Registrar of companies

Consumers

Debt Collectors

Utility providers

Affordability Guidelines

Default Listing Guidelines

Adverse Data Amnesty

National Credit

Amendments

This is an example text. Go ahead and replace it with your own text. It is meant to give you a feeling of how the designs looks including text.Factors impacting

Project Evolution

Credit Environment

Definition of Credit

Providers

New Prescription

Rules

Draft National Credit Regulations

Proposed affordability Regulations

Existing Financial means and prospects

Credit Provider assess Income, Discretionary Income Practical steps to validate Gross Income

3 months bank statements 3 months payslips Other similar confirmations

Variance – look at average of past 3 months Consumer obligations to accurately disclose information Consumer to disclose authentic documentation

Draft National Credit Regulations

Proposed affordability Regulations

Existing financial obligations Calculation to be done for new and extension of existing

agreements Use necessary Expense Norms as per table – if variance - declare

as per Scheduled Questionnaire

Monthly Gross Income Min Monthly fix fact Monthly fix fact + % of inc > min

Minimum Maximum

R 0 R 800 R 0 100%

R 800 R 6 250 R 800.00 6.75%

R 6 250 R 25 000 R 1 541.67 9.00%

R 25 000 R 50 000 R 3 375.00 8.20%

R 50 000 Unlimited R 5 425.00 6.75%

How are we going to verify the data?

Prescription data impact

Prescription data impact

Summary of NCAA prescription No collection on Prescribed Debt No selling of Prescribed Debt No re-activation of Prescribed Debt

Major challenge – Prescription interrupters not historically recorded Effective date of NCAA Application ito NCAA – limited to only Credit Agreements / data on credit

bureaux Municipalities inside or outside NCA? Amendment to existing Prescription Act wrt other debt? Education of Consumers?

Prescription data impact

Prescription data impact cont

To consider impact on data retention: Prescription Interrupters

Tacid or Express Acknowledgement of debt Telephonic vs written – tracking and proof Section 58 / 57 signed – tracking and proof Debt Counselling application – tracking and proof Debit order instruction – tracking and proof PTP – tracking and proof

Prescription delays - Consumer outside SA – 1 year after returning to SA – tracking of consumers outside SA and trigger on return

Tracking above against the account / debt Period to retain data – storage space budgetary impacts Date time stamping and storage for retrieval

Prescription data impact

How are we going to Identify prescribed debt?

Completeness of Data

Missing datasets

Consumer Balance Sheet

Credit Agreements

Other agreements

Living expenses – no agreements

Missing datasets

Missing datasets

Completeness Cross subsidising – household incomes Indigent / SASSA grant recipients

Contact details / Domicilium Updated contact details in collections efforts Changes in Domicilium updates Debt collection success method

Behaviour Debt Collection – behaviour on rehabilitation

Missing datasets

Missing datasets

Income Salary verification Bank statement verification Informal business Maintenance received Income from household - sponsor

Expenses Utilities Taxes Educational fees Medical Insurance Transport – e-toll etc Accommodation Maintenance payments Expense to household - sponsor

Case Study – missing data insights

Local Municipality 1

Local Municipality

# Accounts 35 552

Value of Debtors book R 49 304 151

Local Municipality A

Local Municipality A

Company match CIPC 4%

Government / Public entity 2%

ID Deceased 8%

ID Found 7%

ID Number is valid 64%

Municipal own account 3%

Unable to match 9%

Book analysis on accounts

Body Corporate

Company identified and matched to CIPC

Escalate to Supervisor

Government or Public Entity

Health, School, Religious

ID Deceased

ID Found

ID Number supplied is valid

Multiple ID’s - one chosen

Municipal Own Account

Non-Profit Organisations

Partial Identification to Source Data

Possible Relative

Trust

Unable to Match

Local Municipality A

Company matched CIPC 5%

Government / Pub-lic entity 4%

Health School Re-ligious 4%

ID Deeased 10%

Body Corporate 5%

ID Number sup-plied is valid 53%

Municipal own account 2%

Unable to match 13%

Book analysis on Balance

Body Corporate

Company identified and matched to CIPC

Escalate to Supervisor

Government or Public Entity

Health, School, Religious

ID Deceased

ID Found

ID Number supplied is valid

Multiple ID’s - one chosen

Municipal Own Account

Non-Profit Organisations

Partial Identification to Source Data

Possible Relative

Trust

Unable to Match

Metro Municipality B

Metro Municipality

# Accounts 698 778

Value of Debtors book R 5 013 792 748

Metro Municipality B

Metro Municipality B

Unable to match 3%

ID Found 5%

MM Own account 5%

ID Number 73%

Government / Public entity

2%

Health School Religious 3%

ID Deceased 5%

Book analysis on accounts

Body CorporateMM Own accountMM own account -auto updateCompany Number matched to CIPCCompany Registration FoundEmbassy AccountEscalate to SupervisorGovernment or Public EntityHealth, School , ReligiousID DeceasedID FoundID Number supplied is validMultiple Possible ID's - one chosenLocal Mun 1No-Profit OrganisationPartial identification number to source dataPossible RelativeProperty Owner as per DeedsSupplied Company Name does not match Supplied NumberThe Owner ,Occupant, or no stand numberTrustUnable to Match

Metro Municipality B

Body Corporate 2%

Company match to CIPC 6%

Company Reg found 14%

Government / Public entity 2%

ID Found 5%

ID Supplied is valid 52%

The Owner 2%

Trust 3%

Unable to match 8%

Book analysis on balance

Body CorporateMM own account MM own account -auto updateCompany Number matched to CIPCCompany Registration FoundEmbassy AccountEscalate to SupervisorGovernment or Public EntityHealth, School , ReligiousID DeceasedID FoundID Number supplied is validMultiple Possible ID's - one chosenLocal Mun 1No-Profit OrganisationPartial identification number to source dataPossible RelativeProperty Owner as per DeedsSupplied Company Name does not match Supplied NumberThe Owner ,Occupant, or no stand numberTrustUnable to Match

Metro Municipality B

Focus areas on this book

Description # of accounts Value of book

High focus area 29 354 R36 249 020

Medium focus area 1 994 R5 380 713

Low focus area 4 196 R7 662 818

Other factors to consider

• Status of accounts –active / inactive• Age analysis of accounts – payment recency• Linked accounts• Unidentified owner of account• Organs of state• State employee• Links to supply chain• Links to own employees• Property ownership• Directorships• Company statuses• Credit Balances• Balance to arrears ratio• Rates balance to Property valuation• Organs of state• Municipality own accounts• Indigents – actual vs identified

Burning issues on the table…

DATA• Amnesty• Credit Bureaux • Unregistered Data Providers

COST OF CREDIT• Credit Life Insurance• Interest rates• In Duplum

PROCESSES• Prescribed debt• EAO• Debit Orders• Sect 57, 58• Jurisdictions – Sect 45• Selling repossessed items lower than value

LIMITS• Reckless lending• Affordability assessments• Eligibility for credit

We all need to adjust to be able to reach destination