MBSA Quiz Answers

Here are some expanded answers to the quick quiz questions. Don’t forget to take a look at how you’re doing on the leaderboard at the bottom of the page.

QUESTION 1 ANSWER

What is your understanding of the term Credit Risk?

• Possibility of a financial loss if the borrower doesn’t repay the loan ✅
• Borrower applying for a 30 million facility
• A 25-year-old individual applying for A-Class
• All the above

All customers have the potential of failing to honour their debt obligations (circumstances can change). Credit risk is assessed by looking at customers repayment ability (Income and Expenses) and the customer’s willingness to repay the loan (historical Credit bureau information).

QUESTION 2 ANSWER

How much can be loaned by a customer / company, before he has to take up a Credit Facility with MBFS?

• R10mil ✅
• R15mil
• R5mil
• R50mil

The threshold MBFS will loan before a Credit Facility becomes necessary is R10-million. Anything above this will fall under corporate.

QUESTION 3 ANSWER

What are the required minimum documents for a business/company application?

• UBO declaration form, Company Registration document, Business financials Business bank statements and FICA ✅
• Business Financials, Business bank statements and Personal bank statements for the directors
• UBO declaration form, Bank statements and Financials only
• FICA, Business Bank Statements and a Company Registration document

As per new FIC regulations, specific documentation needs to be obtained before credit can assess a business application. These are the minimum requirements : A signed UBO declaration form, Company Registration document, latest Business financials, Business bank statements and FICA. MBFS may request additional documents, (e.g. service contracts, resolutions if more than one director etc.) in order to review the application.

QUESTION 4 ANSWER

What do you understand as “discretionary income”?

• Total income less total expenses , what is left is called discretionary income ✅
• Total gross income less all payslip deductions
• Total income less monthly debt obligations (as per bureau information)
• 30% of your total income

As per NCA guidelines, all financial institutions need to ensure a full affordability assessment is completed. Discretionary income is one measurement used to calculate if the applicant will be able to make monthly repayments. This involves taking total income (all incoming funds) minus living expenses + monthly debt obligations + other expenses. What is left is considered as discretionary income = an indication of the customers’ ability to repay the new debt.

QUESTION 5 ANSWER

How can MBFS reduced the risk on a deal?

• Request a down payment ✅
• There is no way you can mitigate risk
• Recommend a lower rate
• Discount the car

There are a number of ways to reduce risk on a deal, the single most important one being the request of a down payment. Customers who have put in a down payment are significantly less likely to default on the loan. Another way is to have someone else sign as surety (co-debtor).