1. PUBLIC SECTOR BUSINESS UNIT 7 – 8 February 2013 SALGA LIMPOPO FINANCE WEEK Back to Basics

2. PUBLIC SECTOR BUSINESS UNIT Discussion Points

3. PUBLIC SECTOR BUSINESS UNIT Introduction MBD Credit Solutions is the leading independent provider of credit management solutions in Southern Africa, specifically focusing on the collection of accounts receivables encompassing the entire credit cycle using call centre based and legal collections. MBDCS has 12 years experience in the accounts receivable management field. MBDCS services a wide range of large clients from the private and all levels of public sector. Membership: NCR, Council of Debt Collectors, Law Society, ADRA, ICM, CPA, ACA International Global Credit Ratings – SQ2+ Membership: NCR, Council of Debt Collectors, Law Society, ADRA, ICM, CPA, ACA International Global Credit Ratings – SQ2+

4. PUBLIC SECTOR BUSINESS UNIT About the Public Sector Business Unit National, Provincial and Local Government has a key role to play in meeting the service delivery needs of the people of South Africa. In order for this to occur, a good sustainable financial model is needed, which include good revenue management and debt collection at all municipal levels. MBD Credit Solutions has recognised that the public sector operates within a complex regulatory framework and requires unique revenue management solutions and strategies to meet its broader mandate of service delivery. The dedicated Public Sector Business Unit was established by MBD Credit Solutions to address the specific needs of the Public Sector market.

5. PUBLIC SECTOR BUSINESS UNIT MBD Credit Solutions Clients Telecommunications Retail Commercial Financial Services Subscription Services Public Sector

6. PUBLIC SECTOR BUSINESS UNIT Footprint and Infrastructure

7. PUBLIC SECTOR BUSINESS UNIT Municipality Debt Breakdown Name of Municipality Overall Debtors Book (000) Ba-Phalaborwa 445,270 Polokwane 401,234 Mogalakwena 319,750 Thulamela 278,343 Lepelle-Nkumpi 215,665 Greater Tzaneen 156,674 Thabazimbi 141,436 Bela 104,243 Makhado 100,000 Lephalale 99,264 Name of Municipality Overall Debtors Book (000) Greater Giyani 73,070 Greater Tubatse 70,807 Modimolle 59,409 Greater Letaba 51,130 Musina 42,393 Molemole 37,619 Mookgopong 37,405 Elias Motsoaledi 36,532 Ephraim Mogale 33,820 Aganang, Mutale, Maruleng, Blouberg Fetakgomo, Makhuduthamaga 70,076 Approximately R3.3 billion 24 Municipalities 5 District 25 Local Based on AG Report 01 Aug 2012 / Latest Annual Reports

8. PUBLIC SECTOR BUSINESS UNIT Municipality Challenges Meter Services Management Data Cleansing, Stand Verification & ID Verification Meter Audits & Installation BillingCredit Control Collection Software Systems Debt Collection Customer Care & Query Resolution Call Centre Management & Infrastructure Business Process Revenue Strategies

9. PUBLIC SECTOR BUSINESS UNIT How to get back to basics Hosting & Administration of Accounts Call Centre Setup Pre Legal Collections Legal Collections Debt Acquisition / Restructuring ARM – Account Receivables Management Pre Billing Services

10. PUBLIC SECTOR BUSINESS UNIT How to get back to basics Hosting & Administration of Accounts Call Centre Setup Pre Legal Collections Legal Collections Debt Acquisition / Restructuring Pre Billing Services Meter Services Readings & Cut-Off Meter Audits & Installation Stand Verification

11. PUBLIC SECTOR BUSINESS UNIT How to get back to basics Hosting & Administration of Accounts Call Centre Setup Pre Legal Collections Legal Collections Debt Acquisition / Restructuring Pre Billing Services Hosting & Administration of Accounts Complete Suite of Communication Channels Automated Voice Message, SMS, MMS, Letters, Emails, USSD Billing & Statements Account Management Customer Care

12. PUBLIC SECTOR BUSINESS UNIT How to get back to basics Hosting & Administration of Accounts Call Centre Setup Pre Legal Collections Legal Collections Debt Acquisition / Restructuring Pre Billing Services Setting up of Call Centres Collections Call Centre Customer Care / Query Resolution Call Centre Collections Software Training & Management

13. PUBLIC SECTOR BUSINESS UNIT How to get back to basics Hosting & Administration of Accounts Call Centre Setup Pre Legal Collections Legal Collections Debt Acquisition / Restructuring Pre Billing Services Pre-Legal Collections Early Stage Collections – less than 90 days in arrears Late Stage Collection – 90 days and above in arrears Collection of all Municipal Services Collection of Traffic Fines Segmentation & Debtor Profiling Query Resolution & Customer Care

14. PUBLIC SECTOR BUSINESS UNIT Commission Rate Commission Rates are at 15% (negotiable based on municipality size, volumes, etc.) On arrear accounts that have been handed over No collection, no commission basis No additional fees unless debtor moves over to legal process where undefended pricing may be applicable

15. PUBLIC SECTOR BUSINESS UNIT How to get back to basics Hosting & Administration of Accounts Call Centre Setup Pre Legal Collections Legal Collections Debt Acquisition / Restructuring Pre Billing Services Legal Collections Preferred relationship with Munnik Basson Dagama Inc. Specialist in legal collections Capital Data the – specialist in administration order and debt review

16. PUBLIC SECTOR BUSINESS UNIT How to get back to basics Hosting & Administration of Accounts Call Centre Setup Pre Legal Collections Legal Collections Debt Acquisition / Restructuring Pre Billing Services MBD Credit Solutions has over the last 10 years refined the valuation of debt acquisition portfolios to a fine art. Having concluded in excess of 100 transactions in the private sector, MBD Credit Solutions has obtained detailed insight into the dos and donts of debt acquisition. MBD Credit Solutions valuation techniques and contractual terms and conditions take this experience into account.

17. PUBLIC SECTOR BUSINESS UNIT Debt Acquisition / Restructuring RIGHT TO COLLECT ON BOOK ON CONTINGENCY BASIS WITH COMMISSION SPLIT PAY UPFRONT INSTRUMENT ON SIGNATURE DATE AGREEMENT WITH PUBLIC SECTOR CLIENT UPFRONT VALUE AND COMMISSION RATE ASSIGNED TO DEBTORS BOOK ANALYSIS AND VALUATION OF THE DEBTORS BOOK RECEIPT OF DATA DATA EXTRACTION

18. PUBLIC SECTOR BUSINESS UNIT Values and Number of Accounts MBD Credit Solutions has concluded transactions across a wide range of asset classes including in-store retail credit cards, bank credit cards, personal loans, asset shortfall loans, cellular contracts, and distressed mortgage portfolios. – Total face value R10 billion – Total accounts 2 million accounts MBD Credit Solutions utilises the capacity of the Transaction Capital (MBDCS parent company) Debt Capital Markets team to arrange favourable securitisation terms, rates and covenants and ensure long term operational funding. Transaction Capital has also recently listed on the JSE, ensuring further capital and funding available to MBD Credit Solutions

19. PUBLIC SECTOR BUSINESS UNIT QUESTIONS

20. PUBLIC SECTOR BUSINESS UNIT IMPROVING YOUR REVENUE IS OUR BUSINESS