On Chinese EVs: I'm personally happy if more Chinese EVs settle in South Africa. While I'm not sure about the durability, much has been credited on how much value they offer in relation to price and it would honestly be nice if they are a little closer in SA...
While it's true that some civil servants have ventured into vending and flea markets, I strongly disagree that this trend significantly contributes to Edgar's 7% drop in revenue. Several factors lead me to this conclusion:
1. Limited prevalence:I don't have numbers however working in the Microfinance industry and dealing with these guys I can assure you less than 5% of civil servants engage in clothing or boutiques, and even fewer sell products to their workmates maybe 2 in 50. This limited scope is insufficient to account for a substantial decline in Edgar's revenue.
2. Credit sales: A significant portion of Edgar's sales to civil servants are on credit, with funds deducted through the Salary Services Bureau (SSB). This means Edgar's receives payment before the customer even accesses their salary. Therefore, the decrease in civil servants' earnings has a minimal impact on Edgar's revenue.
3. Debt obligation : The credit sales segment is essentially locked in, as debt is a trap. Customers are obligated to repay, regardless of their financial situation. There are 2 companies I've always noticed on many Civil servants slips, nommatter how the individual is highly leveraged, Tottengram and Edgar's always deduct their money 💰... Everyone else can complain that a client's salary is not deductible due to the client being highly indebted but these guys don't mess.
4. *Cash sales*: Even if a small percentage (less than 10%) of civil servants pay cash, this would only account for a minor shift in revenue, not a substantial 7% drop.
In conclusion, while civil servants' dynamics may play a minor role, they are unlikely to be the primary cause of Edgar's revenue decline. Other factors are likely at play, and i believe as outsiders, we might not get these further to understand the true reasons behind the drop in revenues.
I would not doubt it. These guys are discreet. Totengram's business model is straightforward and low-risk, offering small loans to government civil servants with easy repayment terms. By limiting loan amounts per person and capping total market exposure, they ensure a fixed rate of income with minimal risk of default. Loan amounts are modest, typically below $50-200, with installments capped at around $30-50. Focusing exclusively on civil servants creates a stable and predictable revenue stream, and trust me they make money! And if it were me hahah I would also be silent.
For me, their approach is reminiscent of RenTechs Medallion Fund's limited scope strategy. They've opted for a very limited operating scope, prioritizing maximum returns, predictability, and stability – and boy I believe they've achieved it and are making a killing. I believe they also operate in a big way in Zambia as well.
Thanks well said. I agree with your points. Its a mix of things. I just had never considered the element of Civil servants also being competition.
I think the decrease in earnings would have an impact overtime as affordability impacts purchasing power. So the rate of new customer and average spend decreases.
Since 35% of business is civil servants a drop in revenue has to also be coming from Civil Servants.
It may not be because of people starting side hustles but it's one to watch out for in case.
I’m actually happy China is taking over the automotive market. They make great products and are forcing existing players to innovate.its just unfortunate their after sales support is still poorly. In addition to innovating, the one other thing I like about the Chinese is their ability to work with existing tech in ways that other companies shun. The GW4D20 (Great Wall Motors engine used in most of their current ICE lines), is basically an improved 1CD-FTV engine from 1997 used in the corollas, avensis and Rav4’s of that generation up to 2007, by which time it was considered obsolete and dated. however they took that same engine (Because it’s tried and tested), turbocharged it, add common rail and a modern fuel management system and shipped it in millions of cars. Most manufacturers would freak out at doing this but so far its working for them (it will take a few years to see how they wear and tear).
Have you considered making Youtube videos on these subjects? It would be nice to watch an explanation of the information given
Thanks Eve. Yes thing of doing that pretty soon!
Your nudge will probably make me do this sooner!
Awesome
On Chinese EVs: I'm personally happy if more Chinese EVs settle in South Africa. While I'm not sure about the durability, much has been credited on how much value they offer in relation to price and it would honestly be nice if they are a little closer in SA...
I think the durability is good enough. They have warranties and maintenance plans.
Also they are only getting better!
While it's true that some civil servants have ventured into vending and flea markets, I strongly disagree that this trend significantly contributes to Edgar's 7% drop in revenue. Several factors lead me to this conclusion:
1. Limited prevalence:I don't have numbers however working in the Microfinance industry and dealing with these guys I can assure you less than 5% of civil servants engage in clothing or boutiques, and even fewer sell products to their workmates maybe 2 in 50. This limited scope is insufficient to account for a substantial decline in Edgar's revenue.
2. Credit sales: A significant portion of Edgar's sales to civil servants are on credit, with funds deducted through the Salary Services Bureau (SSB). This means Edgar's receives payment before the customer even accesses their salary. Therefore, the decrease in civil servants' earnings has a minimal impact on Edgar's revenue.
3. Debt obligation : The credit sales segment is essentially locked in, as debt is a trap. Customers are obligated to repay, regardless of their financial situation. There are 2 companies I've always noticed on many Civil servants slips, nommatter how the individual is highly leveraged, Tottengram and Edgar's always deduct their money 💰... Everyone else can complain that a client's salary is not deductible due to the client being highly indebted but these guys don't mess.
4. *Cash sales*: Even if a small percentage (less than 10%) of civil servants pay cash, this would only account for a minor shift in revenue, not a substantial 7% drop.
In conclusion, while civil servants' dynamics may play a minor role, they are unlikely to be the primary cause of Edgar's revenue decline. Other factors are likely at play, and i believe as outsiders, we might not get these further to understand the true reasons behind the drop in revenues.
By the way thanks for the insight on Tottengram. Didn't know them!
I would not doubt it. These guys are discreet. Totengram's business model is straightforward and low-risk, offering small loans to government civil servants with easy repayment terms. By limiting loan amounts per person and capping total market exposure, they ensure a fixed rate of income with minimal risk of default. Loan amounts are modest, typically below $50-200, with installments capped at around $30-50. Focusing exclusively on civil servants creates a stable and predictable revenue stream, and trust me they make money! And if it were me hahah I would also be silent.
For me, their approach is reminiscent of RenTechs Medallion Fund's limited scope strategy. They've opted for a very limited operating scope, prioritizing maximum returns, predictability, and stability – and boy I believe they've achieved it and are making a killing. I believe they also operate in a big way in Zambia as well.
Really interesting. Does sound like not an easy space to get into.
Access today civil servanta is not something you can just walk into.
Thanks well said. I agree with your points. Its a mix of things. I just had never considered the element of Civil servants also being competition.
I think the decrease in earnings would have an impact overtime as affordability impacts purchasing power. So the rate of new customer and average spend decreases.
Since 35% of business is civil servants a drop in revenue has to also be coming from Civil Servants.
It may not be because of people starting side hustles but it's one to watch out for in case.
I’m actually happy China is taking over the automotive market. They make great products and are forcing existing players to innovate.its just unfortunate their after sales support is still poorly. In addition to innovating, the one other thing I like about the Chinese is their ability to work with existing tech in ways that other companies shun. The GW4D20 (Great Wall Motors engine used in most of their current ICE lines), is basically an improved 1CD-FTV engine from 1997 used in the corollas, avensis and Rav4’s of that generation up to 2007, by which time it was considered obsolete and dated. however they took that same engine (Because it’s tried and tested), turbocharged it, add common rail and a modern fuel management system and shipped it in millions of cars. Most manufacturers would freak out at doing this but so far its working for them (it will take a few years to see how they wear and tear).