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June 2017 Credit Management magazine

The CICM magazine for consumer and commercial credit professionals

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continued from page 41 > Trade Organization, the country has reformed its trade and tariff regime and now also has free trade agreements with the EU and the Southern African Development Community (which seeks to ‘achieve development, peace and security, and economic growth, to alleviate poverty, and enhance the standard and quality of life of the peoples of Southern Africa’). The UK Government’s Department for International Trade still considers South Africa a high-growth market. It reports that the UK is one of South Africa's most significant trading partners, with over £10 billion in two-way trade in goods and services. At present, the largest UK exports to South Africa are vehicles, drinks, pharmaceuticals, petroleum-based products and nonmetallic minerals. The UK Government says the country’s capital markets are well structured (which makes finance easier to raise). The sectors considered most important are finance, retail and wholesale, government services, catering and hospitality, manufacturing, property and business services. FUTURE CHALLENGES While the country is well-developed and promising, it has several challenges that the Government needs to tackle. In particular, South Africa has a high unemployment rate (it peaked at 31 percent in 2003 but was 27 percent in late 2016), problems with poverty, poor skills and a capacity shortage, a need forinfrastructure improvements for energy, transport and water, and a high crime rate (most crime statistics are up on 2016 according to BusinessTech). It’s also worth noting the Government’s policy of Broad-Based Black Economic Empowerment (B-BBEE) which aims to bring about the involvement or participation of previously disadvantaged communities (PDCs) into the mainstream economy. The definition of PDCs, according to the policy, is people of colour, women of all races, and the disabled. The policy is only of relevance to corporate governance and has no effect on those who merely export to South Africa. That said, those that intend to set up a business or acquire an existing business in South Africa whose annual revenue is likely to exceed R5 million (around £300,000 as of February 2017) and which will carry out business with government departments, public entities or enterprises, or with companies who supply goods and services to them, must provide their B-BBEE status. More on this can be read at southafrica.doingbusinessguide. co.uk/the-guide/broad-based-blackeconomic-empowerment. THREE REGIONS Almost aligned with Pareto’s rule, it’s important to recognise that 65 percent of South Africa’s GDP comes from just three of the country’s regions – Gauteng, Kwazulu-Natal, and Western Cape. Starting with the first in the list, Gauteng is the country’s economic core that, while only 1.4 percent of South Africa’s landmass, brings in 34 percent of GDP. The area surrounding Johannesburg is reckoned to be home to around 14.6 million people and economic activities include finance, IT, property, media, healthcare, transport, leisure and gold mining. Kwazulu-Natal adds 17 percent to the nation’s GDP and has two of Africa’s largest ports – Durban and Richards Bay. Durban is the busiest container port in Africa and has a stable business base. Richards Bay is highly industrialised and is the largest deep water port on the continent. Manufacturing in the region offers opportunities in transport, communications, printing and publishing, food and beverage production, non-electrical machinery, iron and steel, textiles and finance. Farming is also a considerable activity here. The petroleum and chemical products sectors have grown by 50 percent in ten years while transport equipment has grown 52 percent in the same period. To be continued... 42 June 2017 www.cicm.com The Recognised Standard

EDUCATION APPRENTICESHIP MYTH BUSTER Debbie Tuckwood dispels a few myths about apprenticeships and outlines how the CICM can help you set up credit management training. APPRENTICESHIPS are only for new starters No. You can apply for apprenticeship funding to upskill existing teams. Also, funding arrangements changed in May 2017, which means that now there is no age limit to funding and even those with a degree can access funding for the Level 3 Diploma in Credit Management if they are registered as an apprentice. Credit controllers can learn as much from accounting or other business related apprenticeships No. Credit controllers and collectors are far better off studying for the new credit management apprenticeships. Employers have designed these new apprenticeships to cover the specific knowledge, skills and behaviours required for these specialised roles. If you look at the new Level 2, 3 and 5 apprenticeship standards on the CICM or Government apprenticeship website, you can see the content. You need a local college provider to access credit controller/collector apprenticeships It is great if you have a local college provider who supports credit controller/collector apprenticeships. However, if not, FWD Training, the CICM’s training provider, can deliver the apprenticeship anywhere in the UK. FWD provides apprenticeship administration and coaching and will arrange for your apprentices to join regular daytime virtual classes for the qualification run by CICM expert teachers. Also, your company could deliver the apprenticeship if it is registered as an Apprenticeship Training Provider or has another preferred training provider. CICM is happy to advise on what is required for the new credit management apprenticeships. My company would need specialist credit management teachers to deliver the apprenticeship Not necessarily. Some companies, such as E.ON, have expert trainers and so can provide all the training for their Level 2 credit controller apprentices. Others, however, run the apprenticeship themselves because they are registered as an Apprenticeship Training Organisation and then arrange for their credit controller apprentices to join CICM apprenticeship qualification classes. My company would need a large group to set up a credit controller apprenticeship No. Even if you have only one apprentice, you could run the apprenticeship and sign your apprentice up to one of the CICM open apprenticeship groups for technical training. My company cannot reclaim the full cost of the apprenticeship from their levy This is not correct. Provided you have enough funds in your levy pot, you would be able to reclaim 100 percent of costs for your credit management apprenticeship. There is a very simple calculation to work out the size of your apprenticeship levy – see the CICM website for details. Apprenticeships are free if I work for a non-levy paying company No. Your company would have to pay ten percent towards the cost of the apprenticeship, unless you have less than 50 employees and your apprentice is aged 16-18 when the Government will cover 100 percent of costs. However, regardless of the company size, you will gain extra payments if your apprentice is under 19 requires additional learning support, or is from a disadvantaged background. Also English and Maths tuition, if required, is fully-funded. I can't include CICM training days in my apprenticeship training This is a myth. CICM advisers can work with you to find the best apprenticeship training solution for you. Some companies are combining virtual classes in credit management with training days and assignments on telephone collections, negotiation and influencing and customer relations and cash collections. My apprentices would have to follow the same qualification pathway No. The Level 3 Advanced Credit Controller/ Debt Collection Apprenticeship expects apprentices to specialise in credit risk, advan0ced telephone collections or enforcement and recovery. Also, CICM qualifications are flexible which means that you can choose the best pathway to suit you and your apprentices. Some Level 3 apprentices may want to follow the standard CICM pathway if they hope to progress to the CICM Level 5 Diploma. This would involve examined courses in credit management, business environment, business law and accounting principles. Others may prefer to combine the credit management examined unit with training and assignments. Even if you have only one apprentice who wanted to complete a subject, such as business law or accounting, CICM could support with specialist training if they joined a CICM open apprenticeship class. Your apprenticeship provider could liaise with CICM to arrange this for you. It will be difficult to recruit a credit controller apprentice This should not be the case because your apprenticeship learning provider will support you with recruitment. They will promote the role on the Government's 'recruit an apprenticeship' website and arrange all the sign up paperwork and funding arrangements. Also CICM has 'I love credit' leaflets which you can use to promote your credit management roles at selection days or local events. These are freely available for members. See the CICM website or contact the CICM for full advice and guidance (apprenticeships@cicm. com or 01780 722909). Debbie Tuckwood BA (Hons) FCIEA Doc Soc Sci is Head of Education and Professional Development. The Recognised Standard www.cicm.com June 2017 43

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