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JOHN DANIEL HOLDINGS LIMITED AND ITS SUBSIDIARIES
INTEGRATED ANNUAL REPORT 2011
The acquisition of JDH Credit Services addresses a num-
ber of strategic objectives for the JDH group. JDH Credit
Services is a fledgling credit provider supplying financial
and related instruments to the under banked and margin-
alised sectors of the economies of South Africa and other
countries on the African continent. Current product offer-
ings include micro-credit, micro-insurance, money trans-
fers and business advisory services to the target market.
JDH Credit Services not only provides JDH with a profit-
able and sustainable annuity income but it also provides
financial products which facilitate the sale of products
from other companies in the group.
The noble but humble beginnings of the Grameen Bank
in the late seventies serves as a role model of success
which contradicted all contemporary thinking in respect
of financial services. The bank was established to provide
funding to the financially alienated, in Bangladesh and
with only a community network to rely upon. Today the
bank has over US$1,5bn funds under management, 2 500
branches and 8.3m borrowers. As importantly the bank
has invested in the communities providing empower-
ment and prosperity. JDH Credit Services focuses similarly
on the under banked and marginalised sectors of the pan
African continent.
In June 2010, the total outstanding consumer credit bal-
ances (or gross debtors’ book) was R1.15 trillion represent-
ing a quarter on quarter growth of 0.90%.The breakdown
was as follows: Mortgages accounted for R749.03 billion
(64.85%);“Secured credit agreements”was R215.02 billion
(18.62%); Credit facilities were R129.11 billion (11.18%);
Unsecured credit was R61.14 billion (5.29%); and Short-
term credit was R683.10 million (0.06%).
Less than 6% of all lending is provided to individuals
and organisations on an unsecured basis, reflecting the
difficulties experienced by the ‘under banked’ masses in
South Africa. Significantly the rejection rate on applica-
tions which have been submitted for credit is over 40%.
Of the credit applications by individuals which have been
approved 80% are to individuals earning over R15 000 per
month.The supply of credit to traditional ‘blue collar work-
ers’ has been left predominantly to loan sharks or employ-
ers but the changes in accounting practice has caused the
latter supply to be less and less attractive to the employer.
The graph below shows the growth of the segment over
the past period as compared with other forms of credit
provision.
The requirement for the provision of credit to lower in-
come classes on an ethical basis is clearly a significant
market opportunity. The challenge is to provide credit to
this segment whilst minimising the risk which is naturally
associated therewith.
Credit granted – percentage distribution
Viscacom (Pty) Ltd trading as JDH Credit Services
JDH CREDIT SERVICES