Macroeconomic risks of Nambia
Today we will talk about the state in the southwest of the African continent - Nambia. International ratings of Namibia emphasize high freedom of the press, one of the most effective governments in Africa, but is everything so good in reality? Now we will find out!
Namibia's economy maintains links with the economy of South Africa. The Namibian dollar is tightly tied to the South African rand. This already affects the country's economy, since the main currency of the country depends on the South African rand, which is a very bad indicator of the country's financial situation. Namibia is one of the poorest countries in Africa, unemployment is about 22% of the country's total population. In 2017, Namibia's GDP at purchasing power parity (PPP) was about $13.25 billion ($11,500 per capita (PPP) ), 114th place in the world). However, despite the high level of unemployment and economic instability, Namibia is a tourist country, 35% of the export of services in the country is tourism, which is a very high indicator among the countries of the African continent. Namibia imports about 50% of the food it consumes, as the country's resources do not allow it to produce food within the country, which once again emphasizes Namibia's strong dependence on other countries. Half of the entire workforce of the country (approximately 47%) is engaged in agriculture, mostly in animal husbandry, while GDP from agriculture is less than 10%, what does this say? People mainly grow their own food, rely on livestock and vegetation, as in most countries of the African continent, agriculture does not require large costs for its maintenance, which plays a large role, because the population does not have resources anyway and does not have to spend them yet for the maintenance of livestock, plants, fruits, etc. In short, it can be emphasized that people in Namibia are asking themselves, since the state is not in a position to provide for every citizen of its country. There are also deposits of copper, gold, silver, lead, zinc, tin, tungsten and natural gas in the depths of Namibia, which are not obtained, this is another problem, because it is a loss of a large number from the country's budget. In the end, I would like to note that Namibia is not standing still and is constantly developing in a geometric progression upwards, which inspires great hopes for the country.
Discrod: Vovan#7356
Analysis of the Cardinal company
Financial analysis is one of the main factors in the successful development of the company and its services. Let's analyze the article to analyze all the income and expenses of Cardinal Financial. If we talk a little about the company itself, then it is engaged in various types of lending throughout North America. Every year the company grows, and this served as a reason for analyzing its financial component. The first thing I noticed is that when analyzing the company's profit and loss statement, there is a serious increase in accounts payable.
Looking at the cash flow, it is possible to note the need to reorganize the outflow of funds to borrowers in 2020, as it increased to 4,749 billion dollars. It is worth noting that the company reduced the volume of loans issued in 2020 by 6.5 times, reaching 820 billion dollars, compared to 2019, when the amount of loans reached 7,503 thousand. The company is making progress, reducing the borrowing line in 2020, where the figures reach 2,919,000 people. This is a serious step for the company, because now it can cover its expenses at the expense of its own income.
Taking financial receipts into account, their amount increases almost 6 times annually and will reach 11,515 billion dollars by 2020. In the structure of income from interest income, there is an increase in the share compared to commission income, which indicates the changes made to the company's business plan. The amount of commission income fell to 55,000 in 2020, but in 2019 it reached the mark of 280 billion dollars. The demand for loans grows every year, which pushes the company to expand and, as a result, increase income, but also expenses. The situation with Covid 19 did not prevent the company from developing and reaching new heights in its field.
Draft credit card for 5 million dollars for the fintech credit company Cardinal
Borrower
Cardinal Financial, Inc.
Guarantor
Cardinal Brazil Limited
Creditor
Group of sponsors
Object type
Term loan
Work experience
Senior secured
Object size
5,000,000
Currency
US dollar
Coupon
10%
Tenor
24 months
Payment of interest
Monthly
Basic payments
Amortizing
Safety
Total liabilities
Financial covenants
1. LTV = 70%
2. debt to equity ratio <3x
3. Minimum cash requirements: 3M
Testaments portfolio
1. overdue days 30 <12%
2. overdue days 60 <10%
3. Overdue in 90 days <8%
4. Loss level <8%
Information agreements
quarterly portfolio and balance sheet report,
quarterly report on operational and non-realization expenses
Borrower - Cardinal Financial, Inc. - a small-cap company specializing in financing small and medium-sized businesses. The company is structured as a corporation that controls its capital, separating shares from its activities. This provides faster decision-making and greater flexibility in terms of growth, acquisition opportunities and capital allocation.
The guarantor is Cardinal Brazilia Limited, a private company based in Sao Paulo, Brazil. With a 45-year history of work, the company has a solid track record as a lender and is recognized as a new leader in the field of banking, financial services and financial technologies.
Lender - Accompanying persons will consist of individuals from the financial technology lending industry who have been involved in successful lending businesses within the last 5-10 years that have been acquired or acquired by themselves.
The type of credit line is an urgent loan in the amount of 5 million US dollars for 24 months at 10% per annum at nominal value plus a financing fee of 1%, plus a loan origination fee plus a four-point loan origination fee, paid on an amortized basis to creditors at closing each credit line.
Seniority - the credit line will have priority secured debt and, therefore, will have a higher level of subordination. Priority secured debt consists of senior secured bonds and senior secured bonds for a total amount of 5 million US dollars and a nominal value of 5 million US dollars.
Size of the object - The size of the object will be 5 million US dollars with the possibility of expansion by another 5 million US dollars.
Currency - The loan will be expressed in US dollars at the current exchange rate.
Coupon - the loan will be paid at a coupon rate of 10% per annum with monthly payments at the end of the term.
Duration - The duration of the object - 24 months.
Interest payment - Interest payment will be made monthly at the rate of 10% per annum during the term of the debt, paid quarterly.
Payments of the principal amount of the debt - The entire principal amount of the debt and accrued interest on all loans must be paid on December 31 of each year, unless certain options for early repayment are fulfilled by that date.
Security - 100% of the capital of Cardinal Financial Equity, Cardinal Brazilia Limited and all assets of the Borrower.
Financial covenants - at any time, the property must have an LTV of 70%, a debt-to-equity ratio of <3x, and one-third ($1 million) of cash (used for business operations).
Portfolio Covenants - Once a line of credit is established, Cardinal Financial must remain current on all of its credit obligations for 30 days with the following exceptions: - During any period up to 180 days, it may have a maximum of 12% unpaid credit days . ; - 10% unpaid credit days are allowed for any period from 180 to 365 days; - For any period from 365 to 690 days, 8% unpaid credit days are allowed;
Information covenants - Quarterly reports on the company's financial position and key business indicators are required.
IC MEMO for GOLDFINCH
Summary information
Cashway is a digital platform that provides microloans for retail clients based in Kenya. The company already has experience and clients. It is also worth saying that many well-known investors have already invested in this product, which speaks of its attractiveness for further investments.
Overview of the country
Kenya is a country with a developing economy, the main sphere of which is agriculture, which employs 75% of the country's population, and thanks to this, the country exports: tea, coffee, wheat and cotton.
The sphere of services, mainly tourism, also brings income. It should also be noted the annual population growth of ~ 3.5%. Kenya is one of the fastest growing countries in East Africa.
The official currency is the Kenyan shilling. The Kenyan shilling is one of the most stable currencies in East Africa. But last year it weakened due to the growth of the national debt. Inflation is 5.40% in 2020, and it has been growing slightly since 2018. Currently, the rate of the Central Bank is 7.0%, and the average rate for loans and advances of commercial banks is 12.0%. The country's economy is growing and the standard of living is improving, but there are still weak triggers for big growth. In general, the country's economy has a positive effect on lending companies.
The country has well-regulated microcredit standards and a high degree of investor protection. The comfort of the regulator of Kenya applies to cryptocurrencies, and also looks favorably on the boarding business.
Company overview
The Cashway team consists of experienced and educated people.
Cashway Limited also has a parent company in the USA called Cashway Financial. The organizational structure is quite ordinary, but it seems to be effective, and everything in it is arranged.
Cashway Limited is a digital platform that offers instant short-term microloans to retail customers in Kenya. In the picture below, we see that the average loan amount is 30 USD, and the average term is 30 days. So relatively small sums for short periods. The average monthly interest rate is 15%, which is quite a lot, but we expect it for these types of loans. We also see that these loans are provided without collateral, which can be considered a risk.
Here we can see how the CashWay loan application process works. And this is a very simple and fast process. Clients can get a loan in less than 24 hours.
The company's financial indicators demonstrate growth from year to year. Cashway grew by $358,359 from 2018 to 2021, and according to 2021 and projected net profit at the end of the current year, this indicator will increase by 238% compared to the previous year. We can also see that future estimates for 2022 and 2023 are very optimistic, and net financial income is expected to more than triple in 2022.
Despite the increase in total liabilities that the company takes on, the company's assets are still greater, that is, the company can repay the loan debt without risking its development. It is also important to note the monthly growth of retained earnings by 10-15%, which indicates the correct approach to the distribution of the company's funds and solvency in case of unforeseen circumstances.
Debt / equity = 2.05 - usually this is a bad indicator, since for this type of business it should be in the range of 1-1.5 to be average. But in fact, the company is young, and in the future this indicator may be reduced due to an increase in revenues or shares.
Net margin = 11% - this means that the company has a practically comfortable level and can withstand the volatility of the industry.
ROA = 15.19% - the company uses its assets positively.
ROE = 46% - this is a very good indicator, but in fact 82% of the shares belong to the CEO.
LTD = 1.35 is a high indicator for the industry, which indicates that the company spent money on its activities, and not on equity.
CIR = 20% is a comfortable level for the industry.
Finally, according to the financial statements, we see that Cashway has positive dynamics and expansion in the industry. He spends a lot of money on his own growth and does it well. According to its own forecasts, the company will gradually grow, which looks true.
Having analyzed the company, I can say that we can issue a loan according to the validity period. Cashway demonstrates confident growth despite the competition. Many financial indicators are normal for a young and actively developing company in the field of lending. In Kenya, the regulator is on the side of investors, a positive background for fast loans. The growth of the company is possible in the future, although, according to their forecasts, most likely, it will not be so positive.