- Cash Converters International (CCV) is continuing to diversify its loan book and product offerings, ahead of expected amendments to credit legislation
- The government is considering changing the Small Amount Credit Contract (SACC) legislation, which could include introducing income caps for employed borrowers
- CCV argues the amendment will cause the average loan to double in duration and become 50 per cent more expensive
- As a result, the company is trying to increase the percentage of Medium Amount Credit Contract (MACC) in the company’s total loan book
- Along with the diversification, Cash Converters reported an unaudited gross loan book growth of 8 per cent over Q3
- It also stated it had around $81.2 million in cash and cash equivalents on its balance sheet at the end of March
- CCZ shares ended Wednesday’s session trading at 23.5 cents, up 4.55 per cent
Cash Converters International (CCV) is continuing to diversify its loan book and product offerings, ahead of expected amendments to credit legislation.
The credit and second-hand goods company released a quarterly update on Wednesday, which touched on the Small Amount Credit Contract (SACC) legislation.
The Federal Government is considering several proposed changes to the law, including introducing income caps for employed borrowers.
CCV argues this particular amendment could cause the average small loan to double in duration and become 50 per cent more expensive, with thousands of complaints already received from its customers.
As a result of the proposed changes, the company is trying to increase the amount its Medium Amount Credit Contract (MACC) on the company’s total loan book.
Cash Converters said at the end of the third quarter, MACC made up 23 per cent of its total loans while SACC made up 39 per cent.
Along with the diversification, the finance stock reported that its unaudited gross loan book totalled $163.3 million at the end of Q3, which is a growth of 8 per cent compared to the last quarter.
“As observed in our H1 FY21 results our core business segments have continued to recover in line with Australia’s ongoing economic recovery,” Managing Director, Sam Budiselik stated.
“Our secured vehicle finance and pawnbroking products, alongside our unsecured personal loan products, continue to meet the credit demand among the millions of Australians excluded from the mainstream financial system,” he said.
The company ended March with around $81.2 million in cash and cash equivalents on its balance sheets and CCV’s $150 million loan facility remains drawn to a minimum level of $70.3 million.
Cash Converter International ended Wednesday with shares trading at 23.5 cents per share, up 4.44 per cent.