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 Personal Loan 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:
- the class of customers that the product has been designed for;
- the attributes of the product;
- how the product attributes meet the target market needs;
- the product distribution conditions;
- review periods for the determination;
- review triggers for the determination.
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 or citizen of Australia with a fixed address.
- need amounts of between $5,000 and $25,000;
- 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 to longer product term lengths;
- 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.
Product Key Attributes
The key attributes of the product are:
- loan amounts ranging from $5,000 to $25,000.
- loan terms ranging from 24 months to 48 months.
- a fixed annual percentage interest rate from 14.95% to 27.95%.
- fees (establishment fee, monthly service fee, risk fee, missed payment fee)
- online application and account management
- a repayment frequency of weekly, fortnightly or monthly depending on the consumer's choice and their income cycle
- transparent, legible and easily understood contract, including financial table and product terms.
- loans can be unsecured or secured by a registered vehicle.
- ready access to customer services by either telephone or email during office hours.
How the Key Attributes of this product meet the needs, objectives and financial situation of consumers in the Target Market
The product's key attributes benefit the customer in the Target Market because:
- The Personal Loan limit amounts are closely related to the amounts required by the consumers.
- The Personal Loan product is suitable for the consumers' needs, requirements and objectives, and financial situation.
- Repayments are assessed as affordable for the consumer without hardship.
- The application process is online and most are completed within minutes.
- The funds are available quickly after acceptance of the contract by the consumer.
- The contracts are legible and easy to understand, being only 15 pages long in 10 pt. font or larger.
- There is ready access to customer service by either telephone or email during office hours.
- The customer has an online portal available 24 hours a day, 365 days of the year.
Distribution Conditions and Channels
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 will all present the product appropriately to consumers in that they are primarily through our website or direct communications and:
- do not contain any misleading or deceptive conduct.
- do not consist of any unsolicited offers of credit.
- contain all disclosures required by law.
- are, if distributed through any third party, regularly vetted to ensure compliance with 1, 2 and 3 above.
- are, if required by law, the subject of written agreements with us with those third parties which require compliance with 1,2 and 3 above.
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:
- As to what, if any, trigger events have occurred.
- Why, if known, that event has occurred and in particular if it is due to an external factor and not our product.
- What, if any, action to take in order to ensure compliance with DDO:
- 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 the trigger events on a monthly basis. We will review this TMD if the following trigger events occur in relation to this product:
- One or more terms of the product are altered and we consider that this alteration reasonably suggests that this TMD is no longer appropriate.
- If any external sources such as:
- ASIC; and
- 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.
- The number of defaults as a percentage of loans increases by 10% in a 3-month period.
- 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.
- The number of hardship applications as a percentage of customers increases by 10% in a 3-month period.
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.