What are World Acceptance's Business Segments?
Lending and Collection Operations. The Company seeks to provide short-term
consumer installment loans to the segment of the population that has limited
access to other sources of credit. In evaluating the creditworthiness of potential
customers, the Company primarily examines the individual's discretionary income,
length of current employment and/or sources of income, duration of residence
and prior credit experience. Loans are made to individuals on the basis of their
discretionary income and other factors and are limited to amounts we believe
that customers can reasonably be expected to repay from that income given our
assessment of their stability, ability and willingness to pay. All loan applicants
are required to complete standardized credit applications in person or by telephone
at local Company branches. Each of the Company's local branches are equipped
to perform rapid background, employment and credit checks and approve loan applications
promptly, often while the customer waits. The Company's employees verify the
applicant's sources of income and credit histories through telephone checks
with employers, other employment references and verification with various credit
bureaus. Substantially all new customers are required to submit a listing of
personal property that will serve as collateral to secure the loan, but the
Company does not rely on the value of such collateral in the loan approval process
and generally does not perfect its security interest in that collateral. Accordingly,
if the customer were to default in the repayment of the loan, the Company may
not be able to recover the outstanding loan balance by resorting to the sale
of collateral.
Insurance-related Operations. In certain states, the Company sells credit insurance
to customers in connection with its loans as an agent for an unaffiliated insurance
company. These insurance policies provide for the payment of the outstanding
balance of the Company's loan upon the occurrence of an insured event. The Company
earns a commission on the sale of such credit insurance, which, for most products,
is directly impacted by the claims experience of the insurance company on policies
sold on its behalf by the Company. In states where commissions on certain products
are capped, the commission earned is not directly impacted by the claims experience.
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