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Key management of the organisation have been ear-
marked based on previous industry expertise as well as
experience in African countries. This not only provides
the primary skills required for commercial success but
also ensures access to an established and knowledgeable
business network in each of the countries. The business
strategy is to leverage specific opportunities presented
by each country and expand the company by addressing
niche market needs.
Long-term sustainability will be achieved through cus-
tomer focused service delivery and relevant product of-
fering to the local market.
The JDH Credit Services business model seeks to reduce
the risk associated with the provision of credit to lower
income classes by contractually securing the recovery of
the monthly repayments through the employer’s payroll
infrastructure. JDH Credit Services contracts with both
employer and employee to provide some security in re-
spect of collection on the loan. The process is as follows;
1.1.1. JDH Credit Services identifies employers who wish
to provide loans to employees through a third party.
1.1.2. JDH Credit Services and the employer enter into
an agreement whereby JDH Credit Services com-
missions the employer to include the loan repay-
ment into the payroll run for the company.
1.1.3. JDH Credit Services then markets the service to
the employees, ensuring that the contract with the
employees entitles the employer to make the pay-
roll deduction.
1.1.4. The employer is paid a commission for each de-
duction.
The benefits to the business model aremutual between the
three parties but a further significant benefit to JDH Credit
Services is that the deduction occurs prior to the employee
receiving his/her disposable income. The difficulty most
creditors have with recovery is striking the account before
disbursement of the individual’s disposable income.
JDH Credit Services applies sound lending criteria includ-
ing the evaluation of the employer as well as standard
credit checking of the individual. An affordability test is
then performed as per the NCA requirement but contrary
to normal practice only 50% of the resulting value of the
potential loan amount is approved. In addition the em-
ployee must have a sound employment record with the
employer and the employee further enters into a debit
order agreement with JDH Credit Services which kicks in
immediately the employee ceases to be an employee of
the company.
The JDH Credit Services Credit Committee has estab-
lished policy against which the granting of credit is ad-
ministered and regular audits are conducted to ensure
compliance. The Committee reports directly to the JDH
Audit and Risk Committees. The system entrenches the
governance and credit policies of the company.
JDH Credit Services is currently contracted to six employ-
ers with a combined staff compliment of 9 000 employees.
The company has only 2.5% penetration of the employ-
ees of these companies and are targeting between 10 and
15%. The value of the debtors book at the end of the pe-
riod under review was R 4 591 543.
The acquisition of the JDH Credit Services company by
JDH was delayed until 1 September to facilitate the take
on by the company of a new credit management comput-
er system, FinSquare. The system is purpose designed for
the JDH Credit Services business model and is operational
in one other micro credit provider.
The growth of the business is directly related to funding
availability and subject thereto the objective is to grow
the book by R1million a month through to May 2012 and
to escalate the growth to R2 million per month thereafter.
A portion of this growth is funded by reinvesting returns
from the business into the book.