Consumer finance outsourcer develops South Africa’s first online-only revolving credit facility with Corticon

Download Case Study (PDF File)
Financial Services


Develop a one-of-a-kind, online-only revolving credit facility on behalf of a customer, being mobicred, that would compete directly with major credit cards like Visa and MasterCard and payment options like PayPal, although more retail aligned and mass market focused.


Selected the Integrated Lending Solution (ILS) from Progress partner MIP Holdings Pty Ltd. built on the Progress Corticon Business Rule Management System and Progress OpenEdge platform.


Accelerated its time to market, launching the new mobicred system in just 4 months, from proof of concept to deployment.

Full Story


South Africa has realized tremendous economic growth over the past few years, motivating consumers to spend more and broadening opportunities for local businesses, especially where it relates to e-commerce. It was out of this landscape that mobicred was born: South Africa’s first online-only revolving credit facility. Customers can select mobicred as an online payment option, just like credit cards or PayPal. After a brief once-off online application process, customers are approved for a specific risk-based facility limit that they can use with any participating online merchant. Being a mass-market, retail based product, the mobicred option is particularly attractive in South Africa where approximately only 20-25% of consumers carry a bankcard, primarily as a result of banks tending to be more risk conservative. The other 75% have virtually no other means of purchasing online, other than opting for the onerous EFT payment option.

Recognizing the incredible market opportunity to provide an alternative payment solution, mobicred turned to Redwood, a Cape Town-based company specializing in consumer finance outsourcing, delivery and consultancy solutions for the South African, African and Middle Eastern markets.

“Competition in this area is fierce,” explains Peter Versfeld, Chief Information Officer for Redwood. “If it takes more than a couple of seconds to complete a transaction using mobicred, the consumer has other payment options they can select. For that reason, mobicred was designed to be a lightning-fast, ecommerce aligned, real-time solution.”

Building mobicred from the ground up, the company’s standards for performance, integration and responsiveness were extremely high. Criteria for a new system included: Fast turnaround for on-line applications , easy integration to third-party data sources , real-time application assessment and credit granting , real-time purchase authorization „, ability to comply with South Africa’s complex regulation and legislation , fast customer service capability, and online access for customers to update their data. And Redwood needed all of this functionality delivered online and via web services – at a reasonable cost. 


Redwood evaluated a number of solutions to power mobicred. But the Integrated Lending Solution (ILS) from Progress Software partner MIP Holdings Pty Ltd. was the only system that provided all of the features and functionality Redwood needed in a single solution. ILS is a full-featured and comprehensive banking system, specifically focused on management of loans and revolving credit facilities. “ILS offered us a one-stop-shop solution and ticked off all of our boxes in terms of the credit and fraud risk management capability, compliance, business rules management, the database, the hosting service, ease of integration, and more. Finding everything we needed in a single solution would provide us with a faster time to market, at a lower cost. And we liked the idea of working with just one vendor under a single SLA. MIP was also a solid company with an excellent reputation, which instilled the confidence we needed to move forward,” explains Andrew Goodrich, Chief Executive Officer for Redwood.

ILS is powered by Progress Software technology. The Progress® OpenEdge® database securely retains all information on customers and is used in real-time to approve or decline online purchase transactions from multiple on-line retailers and sales web sites. A key component to ILS is the inclusion of the Progress Corticon Business Rule Management System as the decision engine to drive the process of approving or declining an application, and for those approved, to allocate a spending limit on the account. All of this activity has to happen in real-time while the online applicant waits for a decision. Thus, speed and flexibility of the rules-based process is paramount to completing the purchasing transaction.

“We were particularly attracted to Progress Corticon. It is very flexible and configurable, which is especially important from a consumer finance/credit perspective relative to effecting risk strategies. We realized that this agility would accelerate our time to market, improve our competitive advantage, reduce costs and ultimately increase revenues. For example, we launched mobicred in just four months – from proof of concept to deployment,” says Goodrich.

This faster time to market enabled Redwood to quickly provide mobicred with a state-of-the art solution that is a first of its kind. “In today’s competitive online retail world, it is essential to provide an applicant looking for credit with a response in as short a time as possible,” explains Goodrich. “While there are currently no direct opposition offerings to mobicred, creating a barrier to entry for any new player is seen as critical, as is retaining the market leading position.”

The flexibility of ILS with Progess Corticon also lends itself to keeping up with the rapid pace of change as well as evolving compliance regulations. “The ability to quickly modify or add rules is vital to keeping customers happy, especially in a start-up environment where you are constantly making changes,” says Versfeld. “Progress Corticon makes it easy for any savvy technical business user to implement changes without having to go through layers of development teams or support desks. Today, with Progress Corticon, we can modify a rule in almost real-time instead of the hours or days it would take if we were dependent on hard coding.”


When a customer goes to complete an online transaction, he or she is given a number of payment options – one of which is mobicred. If the customer does not already have a mobicred account, they are prompted to apply for a facility in real-time. ‘Light’ application capture screens are presented to the new applicant which, when completed, trigger a whole series of events. An initial request goes out to conduct basic data validations and to rule out the most obvious fraud situations. Assuming the customer appears valid, the request then goes to a third-party credit bureau via a web service to return the applicant’s credit rating record, i.e. Trade Line data, Payment Profile, etc. Once that data comes back, Progress Corticon then conducts a series of rules-based decisions and performs an analysis check of the credit risk of the consumer. After a credit risk decision has been made, and using an affordability algorithm, Progress Corticon evaluates how much that person can afford, how much of a revolving facility mobicred should extend to them based on the assigned risk category, and apply any risk-based pricing to the repayment terms. As complex as this may seem, all of this activity happens within 2-3 seconds total, appearing instantaneous to the consumer and allowing them to immediately continue the purchase using their new facility.

With the success of mobicred behind them, Versfeld says there is tremendous potential for Redwood to leverage the underlying infrastructure for additional new ventures and client opportunities the company is developing with MIP. “Consumer credit is quite a fast-paced environment. This model really lends itself to keeping up with the needs of the market, the needs of the customers, and potential business opportunities.”

Those opportunities are both local and beyond. With mobicred and the underlying Progress Corticon engine, Redwood has already proven that the solution can be adapted to cater to South Africa’s complex regulation and legislation. “We haven’t even scratched the surface in terms of the rest of Africa; there is so much potential for us throughout. So we are confident we can easily adapt and extend this type of application to other markets, for example in the Middle East. Of course there will be differences, but with Progress Corticon we can simply apply the logic to those rules,” says Goodrich.

Learn more
about the products


Keep exploring
stories like this one

Read Next Story