Types of Risk
The risk of loss resulting from inadequate or failed internal processes, people and systems or from external events, and includes legal risk.
Operational Risk
What is Fenix's fraud hotline email address?
fraudhotline@fenixintl.com
Anticipated financial impact of a default within a specified time horizon.
Expected Loss
Missed between 20% and 70% of payments but has had a day issued in last 30 days
'Average'
"Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes."
Bible (James 4:14)
Negative financial outcomes arising when a person or company fails to meet its contractual obligations for payment
Credit Risk
What are the two repayment criteria, either of which can make a customer eligible for an involuntary repossession?
30 days of consecutive non-payment, or
Account has been locked for >70% of the duration of their loan (i.e. 'Fringe' or 'Risky')
The statistical likelihood of a client failing to pay an obligation.
Probability of Default
Has missed over 90% of their payments or has not had days issued in over 60 days.
"Unless it is jet propelled it will lag behind and risk everything for which it has fought"
President (Nkrumah)
The possibility that governmental policies, rules and preferences may develop in ways that have a negative impact on the firm's business operations.
Political Risk
How many days of non-payment before a client is written-off?
180
The ratio of:
The actual loss on an exposure due to the default of a client / the amount outstanding at time of default
Loss Given Default
Customer who has reached -180 days till lockout
'Cancelled'
"That's when I break down my wall for you, promise that I'd risk it all for you, promise to reveal my all for you."
Rap (Logic)
The probability of the loss occurring from a negative movement in the relative value of a currency.
Foreign Exchange Risk
How often does Fenix expect to update its historical loss rate and repossession assumptions for provisioning?
Semi-annually
The amount that is at risk if a client defaults on a credit obligation.
Exposure at Default
Which risk buckets count as 'Active'?
Good and Average
"For lack of guidance a nation falls, but victory is won through many advisers."
Bible (Proverbs 11:14)
The possibility of immediate or future financial loss as a result of changing perceptions towards the firm by its clients and/or other stakeholders.
Reputational Risk
Regression model used to assign an expected gross default rate to every loan
Random Forest
The ratio of:
The recovery on an exposure due to the default of a client / the amount outstanding at time of default
Recovery Rate
A customer who has reached -178 days til lockout
'Suspended'
"Run the risk of wearing out than rusting out"
President (Teddy Roosevelt)