Medium Amount Credit Contract

Last Update: 20th June 2023

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Target Market Determination

Prepared by Jacaranda Finance Pty Ltd (Jacaranda), ABN 53 162 078 195, Australian Credit Licence number 456 404 (Us, We, Our). This Target Market Determination (TMD) applies to the Medium Amount Credit Contract (MACC) product.

What is a Target Market Determination?

This TMD is designed to offer consumers, distributors and staff an understanding of the class of consumers for which this product has been designed, and is likely to be consistent with the likely objectives, financial situation and needs of the consumers for whom they are intended (the target market). This TMD is general in nature and should not be construed as financial advice. Consumers should obtain independent advice prior to acquiring the product to ensure that it is appropriate for their particular objectives, financial situation and needs.

This TMD describes:

  1. the attributes of the product;
  2. the class of customers that the product has been designed for;
  3. how the product attributes meet the target market needs;
  4. the product distribution conditions;
  5. review periods for the determination;
  6. review triggers for the determination.

Product Key Attributes

The key attributes of the product are:

  • loan amounts ranging from $2,100 to $4,600.

  • loan terms ranging from 9 months to 18 months.

  • a maximum annual interest rate of 47.80%.

  • fees (establishment fee, missed payment fee).

  • a fixed interest rate for the term of the loan.

  • a repayment frequency of weekly, fortnightly or monthly.

  • transparent, legible and easily understood contract, including financial table and loan terms.

  • loans can be secured by a vehicle or unsecured.

  • ready access to customer services and hardship policy.

Target Market

The class of consumers that is the target market for the product are consumers who:

  • meet our credit and eligibility criteria, including (but not limited to):
    • are 19 years of age or older;
    • are employed on a permanent or casual basis;
    • are a permanent resident of Australia.
  • need amounts of between $2,100 and $4,600;
  • need credit to pay for infrequent, and sometimes unforeseeable, expenses that cannot be met from their regular, usual disposable income;
  • want the funds quickly;
  • want the application process to be simple, online, and quick;
  • are interested in medium product term lengths;
  • are willing to use a vehicle as security to increase their available loan limits;
  • are assessed as being able to afford the repayments without hardship;
  • want to make additional or increased repayments without penalty;
  • want product terms that are clear and easy to understand;
  • want ready access to customer services.

Critical Assessment

In making this TMD, a critical assessment must be made to determine how the product meets the needs of the target market

Assessment Criteria Assessment Outcome
Purpose The purpose of the product is to:

  1. provide loans for infrequent and sometimes unforeseeable expenses that cannot be met by the customers regular income;
  2. provide loans to pay for medium sized discretionary purchases;
  3. provide loans to consolidate debts
Key Attributes related to the needs, objectives and financial situation of the Target Market The product's key attributes benefit the customer in the target market because:

  1. the loan amounts are closely related to the amounts required by the target market consumers in their loan applications and communications with the consumers.
  2. the loan terms are suitable for the consumers' needs, requirements and objectives, and financial situation.
  3. the loan repayments are affordable for the consumer without hardship.
  4. the application process is online and most are completed within minutes.
  5. the funds are available quickly after acceptance of the contract by the consumer.
  6. the contracts are legible and easy to understand, being only 15 pages long in 10 pt. font or larger.
  7. there is ready access to customer service.
  8. the customer has an online portal available 24 hours a day, 365 days of the year.
Key Indicators of Product Suitability Historical data over the last 12 months show that this product has been the subject of:

1. low default rates;
2. low number of hardship applications;
3. few customer complaints;

This indicates that the product is suitable for the target market and is meeting the consumers' needs, requirements and objectives, and financial situation.

Will the product deliver what is promised in the future? The product term is only 9 to 18 months. The product does not change over the term of the loan. The product does deliver what is promised over its term.
Does the product need a redesign? As at the last review, the product did not require redesign.
Does the target market need to be narrowed? As at the last review, the product target market did not need to be narrowed.

Distribution Conditions

The following conditions apply to how the product is distributed.

Responsible Lending Obligations The product will be distributed in compliance with all responsible lending obligations.
Voluntary Distribution Conditions The product will be distributed in compliance with the following voluntary distribution conditions:

  • no loans to any customer who does not meet our credit and eligibility criteria.
  • no loans to any customer who wants to deal with a lender in person or via a branch.
  • no loans to any customer who does not wish to pay via direct debit.
Distribution Channels Distribution channels will all present the product appropriately to consumers in that they:

  1. do not contain any misleading or deceptive conduct.
  2. do not consist of any unsolicited offers of credit.
  3. contain all disclosures required by law.
  4. are, if distributed through any third party, regularly vetted to ensure the above.
  5. are, if required by law, the subject of written agreements with us

Scheduled Periodic Reviews

We will conduct periodic reviews of this TMD annually. Our responsible manager will conduct all Design and Distribution Obligation (DDO) reviews and report the results of the review to our board of directors. The report must be provided to the board within two weeks of conducting a review and specify:

  1. As to what, if any, trigger events have occurred.
  2. Why, if known, that event has occurred and in particular if it is due to an external factor and not our product.
  3. What, if any, action to take in order to ensure compliance with DDO such as:
    • No change if all is within the parameters published above; or
    • The product needs a redesign;
    • A new distribution condition is required; or
    • The product must cease to be offered

Other Review Triggers

We will conduct further reviews upon predetermined trigger events. Our responsible manager will monitor for the trigger events on a monthly basis. We will review this TMD if the following trigger events occur in relation to this product:

  1. One or more terms of the product are altered and we consider that this alteration reasonably suggests that this TMD is no longer appropriate.
  2. If any external sources such as:
    a) AFCA;
    b) ASIC; and
    c) Community based consumer organisations;
    communicate to us that they have identified a systemic issue with our Product or if the number of complaints referred to AFCA or by community based consumer organisations increases by 10% in a 3 month period.
  3. The number of defaults as a percentage of loans increases by 10% in a 3-month period.
  4. The number of complaints to our internal dispute resolution process from approved customers as a percentage of customers increases by 10% in a 3-month period.
  5. The number of hardship applications as a percentage of customers increases by 10% in a 3-month period

Significant Dealings

If at any time, we detect that more than 5% of the consumers receiving our product within a three (3) month period are not within our Target Market, we shall report this to ASIC as a Significant Dealing within ten (10) business days.