Singer Sewko


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Consumer Finance

Extension of consumer credit has been an integral part of the Company's operations since shortly after the business was founded 160 years ago. Consumer credit is a key element of the sales offering in the emerging markets in which the Company operates as other forms of credit are less readily available for middle- and lower-income consumers in these markets than is the case in more developed countries.

Approximately 47% of Singer Asia's sales during are on credit. In addition to providing a strong impetus to sales, consumer credit continues to be an important component of revenue and profit; finance charges on consumer instalments represent approximately 12% of the Company's total revenue.

The Company's credit activities generate instalment accounts receivable which are outstanding from three to 36 months and bear interest at rates based upon prevailing consumer interest rates in the various local markets. These accounts receivable are financed by the local Singer Asia companies. It is the Company's consistent practice to finance such accounts receivable by borrowing funds in the country and in the currency where such accounts receivable originate.

Singer Asia has approximately 438,000 active instalment accounts, with a total accounts receivable, net of unearned finance charges and allowances, of $116 million.

Singer Asia continually reviews and updates the credit granting and collection process. This includes: monitoring and refreshing point scoring systems, use of call centers for customer verification and collection follow up, use of credit bureaus and consumer blacklists, use of third-party collection agencies, and enforcing strict repossession policies.

Singer Asia's collection experience has been extremely good. The percentage of instalment receivables in arrears at the end of 2015 was 3%, whilst nearly 50% of customers are in advance.

In addition to credit, Singer Asia also offers a variety of consumer protection plans including extended warranties, protection against product loss or damage due to fire, theft or natural calamities, and debt forgiveness in the event of the death or other extraordinary interruption in a customer's repayment ability.

Singer Asia has significantly broadened the scope of the financial products and services offered to customers. These include bill collection on behalf of utility companies and financial institutions, disbursement of remittances from overseas, and the sale of mobile phone air-time. The Company successfully completes approximately 1 million financial services transactions per month.