About World Acceptance

World Acceptance Corporation operates as a small-loan consumer finance company. The company operated a small-loan consumer finance (installment loan) business in sixteen states as of March 31, 2023. The company offers short-term small installment loans, medium-term larger installment loans, related credit insurance and ancillary products and services to individuals. The company offers traditional installment loans generally between $500 and $6,000, with the average loan origination being $2,359 in the year ended March 31, 2023 (fiscal 2023). The company operates branches in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Texas, Tennessee, Utah, and Wisconsin. The company generally serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses and credit card lenders. The company also offers income tax return preparation services to its loan customers and other individuals. Product Offerings Installment Loans The company primarily offers pre-computed and interest bearing consumer installment loans. The company’s loans are payable in fully-amortizing monthly installments with terms generally from 7 to 27 months and are prepayable at any time without penalty. Insurance Related Operations The company, as an agent for an unaffiliated insurance company, markets and sells credit life, credit accident and health, credit property and auto, unemployment, and accidental death and dismemberment insurance in connection with its loans in selected states where the sale of such insurance is permitted by law. Credit life insurance provides for the payment in full of the borrower's credit obligation to the lender in the event of death. The company offers credit insurance for all loans originated in Alabama, Idaho, Indiana, Kentucky, New Mexico, Oklahoma, South Carolina, Tennessee, Texas and Utah, and on a more limited basis in Georgia, Louisiana, Mississippi, and Missouri. Customers in those states typically obtain such credit insurance through the company. Charges for such credit insurance are made at filed, authorized rates and are stated separately in the company's disclosure to customers, as required by the Truth in Lending Act and by various applicable state laws. In the sale of insurance policies, the company, as an agent, writes policies only within limitations established by its agency contracts with the insurer. The company does not sell credit insurance to non-borrowers. 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. The company has a wholly-owned, captive insurance subsidiary that reinsures a portion of the credit insurance sold in connection with loans made by the company. Certain coverages sold by the company on behalf of the unaffiliated insurance carrier are ceded by the carrier to the captive insurance subsidiary, providing the company with an additional source of income derived from the earned reinsurance premiums. Non-Filing Insurance The company typically does not perfect its security interest in collateral securing its smaller loans by filing UCC financing statements. Non-filing insurance premiums are equal in aggregate amount to the premiums paid by the company to purchase non-filing insurance coverage from an unaffiliated insurance company. Under its non-filing insurance coverage, the company is reimbursed for losses on loans resulting from its policy not to perfect its security interest in collateral securing the loans. Automobile Club Memberships The company also offers automobile club memberships to its borrowers in Alabama, Georgia, Idaho, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Tennessee, Texas, South Carolina, Utah and Wisconsin, as an agent for an unaffiliated automobile club. Club memberships entitle members to automobile breakdown coverage, towing reimbursement and related services. The company is paid a commission on each membership sold, but has no responsibility for administering the club, paying benefits or providing services to club members. The company primarily sells automobile club memberships to borrowers. Tax Preparation Services and Advances The company also offers income tax return preparation and electronic filing services. This program is provided in all but a few of the company’s branches. The company prepared approximately 75,000 returns in fiscal year 2023. In addition, the company’s tax customers are eligible to receive an interest and fee-free tax advance loan which is generally a percentage of the anticipated tax refund amount. This is a beneficial service for its existing customer base, as well as non-loan customers, and it plans to continue to promote this program. Seasonality The company's highest loan demand generally occurs from October to December, its third fiscal quarter. Loan demand is generally lowest and loan repayment highest from January to March, its fourth fiscal quarter. Consequently, the company experiences significant seasonal fluctuations in its operating results and cash needs. Operating results for the company's third fiscal quarter are generally lower than in other quarters, and operating results for its fourth fiscal quarter are generally higher than in other quarters. Operations Lending 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. The company also generates a proprietary credit score in assisting loan decisions to potential new customers that evaluates key attributes, such as payment history, outstanding debt, length of credit history, number of credit inquiries, as well as credit mix. All loan applicants are required to complete standardized credit applications online, in person, or by telephone. Each of the company's local branches are equipped to perform rapid background, employment, and credit bureau checks and approve loan applications promptly. The company's employees verify the applicant's sources of income and credit history. 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. New Loans to Customers Development and continual reinforcement of personal relationships with customers improves the company's ability to monitor their creditworthiness, reduce credit risk, and generate customer loyalty. The company allows refinancing of delinquent loans on a case-by-case basis for those customers who otherwise satisfy the company's credit standards. Each such refinancing is carefully examined before approval in an effort to avoid increasing credit risk. A delinquent loan generally may be refinanced only if the customer has made payments that, together with any credits of insurance premiums or other charges to which the customer is entitled in connection with the refinancing, reduce the balance due on the loan to an amount equal to or less than the original cash advance made in connection with the loan. The company does not allow the amount of the new loan to exceed the original amount of the existing loan. Refinancing delinquent loans for certain customers who have made periodic payments allows the company to increase its average loans outstanding and its interest, fees and other income without experiencing a significant increase in loan losses. These refinancings also provide a resolution to temporary financial setbacks for these borrowers and sustain their credit rating. Collection Operations To reduce late payment risk, local branch staff encourage customers to inform the company in the advance of expected payment problems. Local branch staff also promptly contact delinquent customers following any payment due date and thereafter remain in close contact with such customers through phone calls or letters until payment is received or some other resolution is reached. The company also has a centralized collections team that primarily focuses on customers who have become more than 90 days past due on a recency basis. In Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Tennessee, Utah, and Wisconsin, the company is permitted under state laws to garnish customers' wages, within certain circumstances, for repayment of loans, but the company does not otherwise generally resort to litigation for collection purposes and rarely attempts to foreclose on collateral. Government Regulation Many customers borrow from more than one finance company, which enables the company, subject to the limitations of various consumer protection and privacy statutes, including, but not limited to, the Fair Credit Reporting Act and the Gramm-Leach-Bliley Act, to obtain information on the credit history of specific customers from other consumer finance companies. The company's captive insurance subsidiary is regulated by the insurance authorities of the Turks and Caicos Islands of the British West Indies, where the subsidiary is organized and domiciled. In addition to state and local laws and regulations, the company are subject to numerous federal laws and regulations that affect the company’s lending operations. These laws include the Truth in Lending Act, the Equal Credit Opportunity Act, the Military Lending Act, the Fair Credit Reporting Act, and the regulations thereunder, and the Federal Trade Commission's Credit Practices Rule. History World Acceptance Corporation was founded in 1962. The company was incorporated under the laws of South Carolina in 1973.