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Johannesburg - Transaction Capital has decided to exit the unsecured lending market because pressure on consumers is rendering them unable to pay back their debts, said CEO Dave Hurwitz, according to City Press.
Transaction Capital is a lending company which also finances the taxi industry and provides credit services.
The company released its unaudited interim results on Tuesday for the six-month period to March 31 2014 and while the company made a profit of R251m, Hurwitz said it would abandon providing unsecured credit lending to consumers.
“South African consumers are under pressure. We believe that in the medium term, this will not change. The conditions do affect our credit service business and collection, which is our revenue … It is difficult to collect when one is under pressure,” said Hurwitz.
Transaction Capital has 2 000 debt collection agencies and 16 000 registered collectors.
Hurwitz did not rule out the possibility of returning to the unsecured lending market.
“We believe it was a good decision for shareholders … For the next two years, we will be outside that space, but if we find something that is a differentiated offering, we could consider it.
“We took a deliberate decision to focus on income-producing assets of SMEs [small and medium enterprises] and no longer financing of consumption.”
Transaction Capital is also looking for growth in its taxi financing subsidiary, SA Taxi.
“We plan on leveraging our market positioning by enhancing our value proposition to clients and in March we started financing newly introduced Nissan minibuses,” said Hurwitz.
There are about 200 000 minibus taxis on the road. Approximately 70 000 of them are under finance and about 23 000 of these are financed with SA Taxi.
Hurwitz said there was a push by government to remove older, unsafe vehicles from the road and this provides the company with a huge opportunity.
Transaction Capital will grow financing to small and medium enterprises, despite it being a “risky and fragmented market”.
The company has also set aside R1bn for acquisitions.
- Fin24
Help us help you by taking our second annual Debt survey and you could win R3 000, or add your voice by sharing your debt experiences, debt-busting tips and insights. Have a question? Ask our experts.
Transaction Capital is a lending company which also finances the taxi industry and provides credit services.
The company released its unaudited interim results on Tuesday for the six-month period to March 31 2014 and while the company made a profit of R251m, Hurwitz said it would abandon providing unsecured credit lending to consumers.
“South African consumers are under pressure. We believe that in the medium term, this will not change. The conditions do affect our credit service business and collection, which is our revenue … It is difficult to collect when one is under pressure,” said Hurwitz.
Transaction Capital has 2 000 debt collection agencies and 16 000 registered collectors.
Hurwitz did not rule out the possibility of returning to the unsecured lending market.
“We believe it was a good decision for shareholders … For the next two years, we will be outside that space, but if we find something that is a differentiated offering, we could consider it.
“We took a deliberate decision to focus on income-producing assets of SMEs [small and medium enterprises] and no longer financing of consumption.”
Transaction Capital is also looking for growth in its taxi financing subsidiary, SA Taxi.
“We plan on leveraging our market positioning by enhancing our value proposition to clients and in March we started financing newly introduced Nissan minibuses,” said Hurwitz.
There are about 200 000 minibus taxis on the road. Approximately 70 000 of them are under finance and about 23 000 of these are financed with SA Taxi.
Hurwitz said there was a push by government to remove older, unsafe vehicles from the road and this provides the company with a huge opportunity.
Transaction Capital will grow financing to small and medium enterprises, despite it being a “risky and fragmented market”.
The company has also set aside R1bn for acquisitions.
- Fin24
Help us help you by taking our second annual Debt survey and you could win R3 000, or add your voice by sharing your debt experiences, debt-busting tips and insights. Have a question? Ask our experts.
