Linking unlinked data

South African Credit Arena Credit Providers Debt Counsellors Debt Collectors # accounts 79.42m 14 Credit Bureaux 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

NCR Credit standing

NCR Consumer impairment

NCR Enquiries origin

Full picture? Credit vs 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 CategoryQ end Jun 2007 Q end Dec 2013 Q end Jun 2014 NCA CR Active Cons m m22.12 m NCA Accounts m m79.42 m NCA Enquiries m 348,66 m m NCA Total CreditR bR bR b NCA Impaired11.36 m19.74 m19.27 m NCA Debt bookR tR tR t Municipal Debt’05 R b’10 R b’13 R b Current consumers on Credit Bureaux 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 :01pm

IMFO: Municipal debt – Rev sources

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 -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 TelcosInsurersSubscribersCourts 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 IncomeMin Monthly fix factMonthly fix fact + % of inc > min MinimumMaximum R 0R 800R 0100% R 800R 6 250R % R 6 250R R % R R R % R UnlimitedR %

How are we going to verify the data?

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 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 methodBehaviour  Debt Collection – behaviour on rehabilitation

Missing datasets Income  Salary verification  Bank statement verification  Informal business  Maintenance received  Income from household - sponsorExpenses  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 Value of Debtors bookR

Local Municipality A

Metro Municipality B Metro Municipality # Accounts Value of Debtors bookR

Metro Municipality B

Focus areas on this book Description# of accountsValue of book High focus area29 354R Medium focus area1 994R Low focus area4 196R

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