RESHAPINGUNSECUREDLENDINGDanieDuToit

CONTEXT

Ø Capfinhistoricalstructure:• Loansfundedbyexternalparty• Pepkorsuppliedservicesthrough

• SouthernViewFinanceSA(contactcentreandcredit)• VanAsandAssociates(debtcollection)• Pep&Ackermans(loanapplications)

Ø PepkorwillstartfundingCapfinloansfromApril2019• Toassumecompletecontrolovercustomercreditexperience,andsustainCapfin’sprofitcontributiontoPepkor• Capfinstrategyandoperationswillremainunchanged• Pepkorwillalsocontinuetocollectonexistingloanbook

Ø ThispresentationisabouttheintegratedCapfinbusiness

MakingyourbestlifepossiblethroughaCapfinloan.Reshapingunsecuredlending.Ourcustomer-firstapproachischangingthestoryofunsecuredlendinginSouthAfrica.

UNDERSTANDINGOURCUSTOMER

Ø Ourtypicalcustomerisunderpressure• Lowerendoftheincomespectrum(avg.R10.4kmonthly)• Workinghardtomoveforwardinlife

Ø Wehelpthembyoffering:• Creditthattheycanafford• Accessibilityandease• Exceptionalservice

Ø Ourloansaretypicallyusedfor:• Education• Unforeseenexpenseslikefuneralsorcaraccidents• Durableproducts• Regularhouseholdexpensesintimesofcrisis

Sheldon - ResilientSurvivalist

“Thankyouforthewayyoutreatedmeonyourside,IwilladvertiseCapfinalways.”

- CapfinCustomer

CAPFINATAGLANCE

Ø Company• Objective:profitthroughahealthyandgrowingbookofunsecuredloans(notretailcredit)• 960 employees

Ø CapfinLoans• FromR1000toR50000R4800averageloansize

• 3/6/12/24monthsrepaymentterms8monthsaverageloanterm

• 872thousandloansactivatedp.a.

Ø Debtor’sBook• 325thousandactivecustomers• R2.1billiongrossvalue

Ø Responsiblelender• Regulatedindustry,regulatedpricing• Trackrecordofcompliantandethicallendingpractices• Weactivate<30% ofnewcustomerapplications• Verylowvolumeofcomplaints(1in10000loans)

“WhatyousayiswhatIget.YourwordisyouhonourandthatwhatIlikeaboutyourcompanyitisoneofthefewinthecountrythatdoesn’tscampeoplethereforeIkeeponreturningtothecompany.”

- CapfinCustomer

SIMPLEPROCESS

RetailChannel▪ Pep▪ Ackermans▪ Other

MobileChannel▪ SMS▪ USSD

DigitalChannel▪ Webdirect▪ Digitalleadpartners

CustomScorecards▪ Applicationscorecard

▪ Behaviouralscorecard

DocumentChannels▪ DEA▪ Retailscan▪ Webupload▪ E-Mail▪ Fax

DocumentVetting▪ Agent(callcentre)▪ Automated

ProcessSteps1. Affordability2. Offer3. Contract

OriginationPlatforms▪ Callcentre-based▪ Onlineself-service

Tobankaccount*▪ 12%sameday▪ 32%nextday

LoanApplication

CentralCreditScoring

ProofofIncome

LoanOrigination

LoanDisbursement

CAPABILITIESANDSCALE

Ø Centralizedoperations• 1000-seat,award-winningcontactcentre• Centralizedcreditscoringanddecisioning• AgileITdevelopment,withteamofapproximately100• Locatedinsingle,customfacilityinKuilsrivier

Ø Custom-developedIP• Bespokecustomersegmentationmodel• Custom-builtscorecardsforshorttermunsecuredlending• Advancedanalyticsandcreditriskmanagement

Ø Strongcultureandemployeeengagement

WECOMPETETOWIN

Ø Industryandcompetition• Wecompetewithawiderangeofcreditproviders,includingbanks• Highlycompetitiveandregulated(NCA,DebiCheck,Popia)• Slow/negativegrowthinloanvolume,increaseinloanvalue

Ø Leadingmarketshareforloans2- to24months• Capfin16%ofloansactivated(Finbondclosestcompetitor)• Capfin18%invalueofloansactivated(Capitecclosestcompetitor)

Ø Ourfocusandpositioning• 100%focusedonshort-term,unsecuredlending• Fullserviceinallchannels• Endorsedbytrustedbrands

OURGROWTHSTRATEGY

Ø Vision:CapfinEverywhere

Ø Growthdrivers• Credit – continuetoevolveouroffering• Channels – expandourchannelswithafocusondigital• Partners – addstrategicdistributionpartners• Brand – buildatrustedbrand

Ø Howwewin• Exceptionalservice• Trustedbrand• Agreatcustomerexperiencethatcaterstoourtargetmarketsegments

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Oct- 2011 Oct- 2013 Oct- 2015 Oct- 2017

Billion

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GrossDebtor'sBook

RECOGNITIONS

Ø BPESA/CCMGBestLargeCaptiveContactCentre• Multiplewinner(2015,2016,2018)

Ø SundayTimesTopBrands2018• Winnerinincategoryunsecuredlending