Daily Price Movement / General Discussion, page-19820

Sometimes the arrears can be explained.

For example, (from memory) in March or April 2020 Z1P reported a large increase in arrears but they noted that as an impact from a strategic decision that was made 6-odd months earlier to take on more credit risk (higher risk = higher return). This is pretty normal in any business that provides credit, banks do the same. In good times they loosen their policies and lend to more people including ones that are slightly more risky but in economic downturns they tighten the tap right up. So the sharp increase in arrears early last year could be explained, it made sense.

It could be that something similar happened this time around, they are taking more risks to grow quicker. I don't know how else they would have increased their arrears rate by so much in such a short period of time? We don't know any details so we are left guessing.

Also just as an FYI APT will always have a less volatile arrears rates and bad debt charges as long as they only offer pay-in-4, the least risky and least volatile product. Z1P naturally has higher rates due to some riskier products e.g. ZipMoney, business loans etc.