Performance

The company is self-sustainable and has recorded a profit averaging to R16.5 million per annum for the past five (5) financial years. As a lending organisation operating in a home loan sector, the provision for bad debt is maintained at 3% of the total loan book. It should be noted that the bad debt provision does not exceed the above norm, which is an indicative of sound credit assessment, control of collections and a good legal recovery processes. The company’s bad debt is currently maintained at 1.1% against the Risima policy.

The capital structure of the balance sheet, where shareholder funds equals approximately 97% of the total assets, clearly shows that the company is not financially geared and does not have access to external funding

The return on average equity or shareholder funds is maintained at approximately 7%, which is viewed as good for a state owned Business Company, but however this does not compare favourably with the commercial banking industries, which achieves a return of an average of 20% per annum.