2021: Pursuing the pockets of profit

During the COVID-19 crisis, the media has focused much on the weak economy and stressed South African consumers. Figures show an increase in unemployment and for those lucky to be employed, many suffered decreased earnings through salary cuts. All this points to a highly strained economic environment.

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Are we entering a mortgage provision spiral?

The South African credit bureau TransUnion recently released data on the performance of various different products within the bureau in their ”Quarterly Overview of Consumer Credit Trends” for the third quarter of 2020. With the COVID-19 crisis, 2020 was characterised by a severe reduction in account originations and payment holidays in Q2 with a high increase in non-performing accounts in Q3 as payment holidays ceased and stressed consumers failed to pay their accounts.

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The 7 types of credit risk in SME lending

It is common knowledge in the industry that the credit risk assessment of a consumer applying for credit is far less complex than that of a business that is applying for credit.

Why is this the case?

Simply put, consumers are usually very similar in their requirements and risks (homogenous) whilst businesses have far more varying risk elements (heterogenous).

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Scoring in collections webinar

Principa Decisions (Pty) L

Globally there is immense pressure on collections and 2021 is due to be another year where collection departments will be forced to improve what they do and how they do it.

A variety of themes have emanated over the last few months, and collection departments are focusing on how to better engage the debtors as well as the introduction of sophistication through themes such as digital collections and advanced scoring.

Scoring in collections webinar

In November 2020 Principa ran a “scoring in collections” webinar in partnership with CIS Kenya (equivalent of South Africa’s SACCRA). During this 1 hour and 20-minute webinar we covered a wide range of themes surrounding scoring in collections. This included how to introduce scoring into collections, the different types of scoring and then some of the bigger themes such as how machine learning might help your collections. If you’d like to know the answer to the last point, please download our free whitepaper which details how Principa have successfully deployed machine learning models and a machine learning platform at the largest debt collection agency in Africa.

The list of topics covered in the webinar are the following:

  • Collections 2020
  • Different types of scorecards
  • Using a collection scorecard within a collection strategy
  • Bringing all the models together
  • Machine learning
  • Contactability model considerations
  • Settlement model considerations
  • Q&A

To watch the full webinar click here.  If you’d like to discuss your collection or scoring concerns, please be in touch with us below.

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Why Principa’s FinSmart is superior CreditTech

Principa’s FinSmart has become the industry’s go-to solution set for end-to-end credit management.

Our credit risk management software products reduce risk and improve profitability by streamlining processes, increasing efficiency, and automating data-driven decision making across the credit lifecycle.

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