Inside outPaul Kim

Western Cape Funding Fair 2019.06.12

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Paul

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Picsa

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Financial health for low-income employees

The problem

Before Picsa I was drowning in debt. I just realised that I don’t want to be drowning in debt anymore and here is an opportunity, just grab it so you can be rid of your debt burden.Elizabeth

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Toxic environment

Poor financial health

Bad behaviour

The problem

● Complex and costly products

● Perverse incentive structures

● Low levels of financial literacy

● Too much debt (72%) ● Poor preparation for

retirement (6%)● Consumption driven

● Low income South Africans affected the most

People are entrapped

Financial Services

ProvidersPeople

Helping people flourish

PeoplePicsa

Solution

Value for money Products

Practical Education

Impactful Rewards

32” LED TV: Popular retailer's e-commerce price as on April 2019

High priced competitor

Low priced competitor Picsa

LED TV cash price R3 999 R2 499 R2 499

Monthly installment R303 R173.52 R177

Term (months) 36 30 30

Interest rate 23.75% 23.75% 23.50%

Credit life insurance Unknown R202.20 R0

Total cost of credit (before receiving EarnBacks) R10 908 R5 205.53 R5 068.95

EarnBacks R874.95

Total cost of credit (after receiving EarnBacks) R4 194

Save between R1 011.53 (19.43%) and R6 714 (61.55%)

Loans

EarnBacks Rewards

Voluntary: R5p/m Compulsory: R4p/m

Funeral cover

Long-term investments: Minimums Picsa clients get free access to Allan Gray Balanced Fund

From R1 p/m

Trust AND Competence

Trust Competence

Friends and family

Financial services providers

Employers

High cost

Low cost

Financial health focus

Product focus

New single product-entrants

Loan sharks

Life companies

New generation banks

Big 4 banks

Discovery

Competition: Low income

Employers

Problems with retirement fundsIssues● Investment -> Long-term (60 years old+)● Risk cover -> Death, illness and accidents ● Structure -> High costs, no tax benefits

Results● Reach retirement with poor financial behaviour + punitive

debt● Poor standard of living pre-retirement● Stressed at work, leave employment to access funds,

garnishee orders

Picsa loans* 15% became debt free

10% decrease in loan balance

Other loans*5% became debt free

24% increase in loan balance

*Over 7 month period

Impact

Impact on clients

Like I feel today, I don’t feel like a farmworker. I feel like a rich woman because I can control my finances through Picsa.Elizabeth

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Inside Out

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In closing

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Thank you

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