This proposal was conceptualized back in 2007. It attempts to address the issue we have in Cardealerships in Kuwait with Finance Companies staffing their Salesmen in a Car Dealership.
If you are interested in financing this project kindly get in touch
email: gkabbara@yahoo.com
A Prposal for Centralizing credit approval systems for Car Dealerships
1. Proposal 1
Prepared by. Ghassan Kabbara
All Rights reserved
Conceptualized in 2007
Updated Presentation Sept 2008
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This proposal has been conceptualized
and prepared by Ghassan Kabbara.
Any information that you will obtain
hereafter will remain with you in strict
confidence.
Further due diligence on the project matter
for the purpose of conducting a
feasibility study of the proposed project
will only be initiated upon the approval
of Mr. Ghassan Kabbara in writing.
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You the viewer will be required to
sign an NDA immediately after the
Presentation has been made.
If you agreed to these terms and
conditions we shall proceed with
the presentation
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Proposal for
Centralizing of Credit
Approval System For
Dealerships
Phase 1
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A Car Dealership in Kuwait has a
primary objective.
Selling Cars.
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Selling cars normally occurs in a
Showroom. This “Showroom”
besides having Car Exhibits for
Display also occupies Salesmen
and Staff of multiple Financial
Institutions.
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We all know that the Salesman job
is to Sell Cars and get the best deal
for his dealership by getting the
maximum profit.
Regardless of the outcome of the
Profit a Prospect who enters the
showroom eventually is converted
into a Customer who is willing to
Finance payments for his Car.
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Before we proceed it is important to note
that over 85% of the Sales are Financed
by one of multiple available Financial
Institutes (FI) in
Kuwait.(KFH, CFC, NBK, etc.) Over 10 FIs
offering Financing.
Hence the Customer is directed to the
Representative of an FI who calculates
his payment plan once the dealership
salesman has secured the deal.
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This frees up the Salesman to take
on the next potential customer
while his to-be customers finalizes
the deal with the Representative of
the Finance Company.
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Usually Payment plans for all the FI
are very similar. Depending on the
offering of the lenders.
Conventional and Islamic Finance
Instruments exist.
However a flaw lies in the Credit
approval process that some FI take
advantage of for the benefit of
making the Sale.
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Once the customer has decided on
the payment plan and has been
approved the Finance
Representative utilizing his
Application that connects him to
his company‟s server prepares the
necessary documents and get the
customers signature and follows up
with the approval process.
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What we have here is a bunch of
representatives all accessing their
Server for Credit approval and
document printing.
Some FI even utilize a manual
system.
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In the following graphic example I
have shown only 2 showrooms
connecting to 2 FI Systems
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Problems with this setup
The Selling process is delayed.
There is duplication of effort done initially by
Salesman and then by Representative.
Corruption occurs as Salesmen are getting un-
official commissions from FIs for passing
Customers to them. Kick-backs
For each Showroom in Kuwait there is on
average 4-5 Representatives for each FI
participating in the Dealership occupying floor
space that can be used otherwise for displaying
automobiles.
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Problems with Setup Cont..
Extra cost for FI to connect Systems to
Central Server. Cost of
Link, Servers, printers, Occupying Tel
lines for Internet Access.
License costs on Server for S/W.
Each credit approval system differs for
each FI provided multiple forms for
Dealership to process.
No connection between Dealership
database with The FI Database
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Problems with Setup Cont..
Customer time is wasted as he moves
form Salesman to Representative and
back to Salesman.
Not All FI systems have direct access to
monitor Customer Credit Rating.
Black Listed Customers can bypass the
system. No control.
There is multiple database of customer
records in each of the FI database. No
Customer data integrity.
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Advantages to the FI in Dealership
Presence in Showroom provides a
means to market his plans.
Hence Attracts more customers.
Frees Salesman to continue with
potential customer during peak
hours.
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But does physical presence of FI
Representative add value to the
Dealership?
Wouldn‟t the Dealership achieve
more benefit if the Customer‟s
experience is a delighted.
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Can we find a solution to address
these problems and possible
introduce a more automated
Streamlined System where there
will be Increased Revenues and
reduced costs to Dealerships.
Can we find a solution to lower
costs to the FI.
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Questions come to mind.
– Did this solution address the problems we
have identified?
– Does it produce cost saving for the FI?
– Will the Dealership accept to remove the FI
from their showrooms?
– Is it Feasible to Generate Revenue for the
Hosting Entity?
– What is the potential growth of such a
project?
– Has someone else beat us to it?
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Key Question: how will the
Dealership benefit from eliminating
the FI in the Showroom?
– Cost reduction
– Streamline the Selling process
– One stop shop.
– Free Floor Space.
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Did this solution address the
problems we have identified.
The Selling process is delayed.
– The new setup seems to improve the
process as Customer has to approach
only Salesman who inputs the
payment plan and a printout for all FI
plans is produced. Giving Customer
the option of choosing the desired
plan.
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Did this solution address the
problems we have identified
There is duplication of effort done
initially by Salesman and then by
Representative.
– the Salesman has to input the
Customer Details (Civil Id) that will be
linked to the Hosting Server
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Did this solution address the
problems we have identified
Corruption occurs as Salesmen are
getting un-official commissions
from FIs for passing Customers to
them.
– This can be monitored as each
Salesman ID will be logged and
audited in the system.
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Did this solution address the
problems we have identified
For each Showroom in Kuwait there
is on average 4-5 Representatives
for each FI in the Dealership
– No need for an FI representative in
each showroom. The automated
approval system will Credit controls
This produces a significant cost
saving on Human Resources as well
for the FIs.
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Did this solution address the
problems we have identified
Extra cost for FI to connect
Systems to Central Server. Cost of
Link, Servers, printers.
– Although a minor cost burden it will
be Cost reduction for FI as they no
longer have a presence in the
showroom. (also reduces
maintenance and having to resort to
manual work)
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Does it produce cost saving for the
FI. (Example)
If each FI has one representative in Each
Showroom and one PC, and a
connection with S/W. A cost saving of
approximately KD 120,000 /year on Staff
can be realized. Taking only the top 5
dealerships assuming only 5 showrooms
for each. Cost of Employee is KD 400.
Other costs for H/W, S/W Lic and IT
support staff, Hiring, Firing, not included
yet.
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Did this solution address the
problems we have identified
License costs on Server for S/W.
– License costs on main Server for each
End user will be reduced as there is
no need to access servers (now back
office servers) from the showroom.
– Again this is a cost burden to the FI
that will be reduced.
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Did this solution address the
problems we have identified
Each credit approval system differs
for each FI provided multiple forms
for Dealership to process.
– Centralized on Application that is
hosted will provided a standard set of
e-forms outputs for a dealership.
Improving the selling process even
more.
– The whole process will be Automate
and the approval cycle time will be
reduced.
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Did this solution address the
problems we have identified
No connection between Dealership
database with The FI Database.
– Dealership Data can be extracted to
the FI Database. (info such as car
model prices, Customer info, history
can be imported into the FI Server for
calculation of payment plan.)
Alternative is for portal application
used by Salemans to access dual
databases.
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Did this solution address the
problems we have identified
Customer time is wasted as he
moves form Salesman to
Representative and back to
salesman
– Customer only has to settle down with
ONE Salesman to close the deal.
FUTURE PLANS WILL ENABLE
CUSTOMER TO USE A KOISK.
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Did this solution address the
problems we have identified
Not All FI systems have direct
access to monitor Customer Credit
Rating.
– The FI Server can be linked to the
Credit rating application. (CBK) or the
providing entity such as CI-NET.
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Did this solution address the
problems we have identified
Black Listed Customers can bypass
the system.
– Black listed customer Data can be
accessed from the source or imported
to FI. None need to send multiple
CD‟s, printouts etc to Dealership.
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Did this solution address the
problems we have identified
There is multiple database of
customer records in each of the FI
database.
– The Centralized Hosting Server will
have a single Customer Database.
This will be used for Audit
purposes, for control of Credit Rating
for ensuring Integrity of Customer
Data.
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Is it Feasible to Generate Revenue
for the Hosting Entity
This is the BIG question.
What are the sources of Revenue.
– An Agreed Income per Transaction.
– A percentage of the direct saving.
– A Leased Fee for utilization of the
Server.
– External access to customers for FI
calculations. TCO of owning a vehicle.
– As creative as we can get.
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How to provide Incentives to FI
Shareholders. Potential Growth
Offer them Shares in the Hosting
Entity.
Promising them that this Hosting
Service will move on beyond Car
Dealerships.
Promising them that this Hosting
Service will move beyond the
physical borders of Kuwait.
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Has anyone else beat us to this?
In Kuwait?
In the GCC?
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More advantages
Internet payment plans can be
made via a portal for customers.
Koisks in Dealerships are being
installed that can be linked to the
hosting Server.
Better Credit Control by CBK.(CI-
Net)
Lender Vs Mediator Vs Borrower
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This setup is going to happen Soon.
Do you want to watch this opportunity
go by.
Knowing the potential of the Earnings
that can be generated by this setup why
wait. It will take at least one year to
prepare the infrastructure.
How will this effect the current Credit
constraints that the CBK has imposed?
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Proposal for Centralizing
of Dealership System for
Dealerships
„SaaS”
Phase 2
“Kerridge as an Example”
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Proposal for Centralizing
of Credit Approval
System for
Merchants(Retail
Outlets)
Phase3
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Proposal for Centralizing
of Credit Approval
System in Dealerships
in GCC “SaaS”
Phase4
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Summary
Phase 1 – Offer SaaS to Dealerships in
Kuwait. Min 2 major dealers. The rest will
soon follow.
Phase 2 – Offer Kerridge SaaS with the
Hosting Company. (Not in our control
however)
Phase 3 – Offer SaaS to Merchant Retail
Outlets whom FI have existing presence.
Phase 4. – Explorer expanding to GCC
Dealerships.
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If you want to build a thriving
business you have to see beyond
today‟s certainties to tomorrow‟s
uncertainties. You have to look at
what is going to happen next in
your field and put your self in a
position to take advantage of it.
• Extract taken from “The Second Bounce
of the Ball” – Turning Risk into
Opportunity
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NDA
Confidentiality Agreement
Between
Ghassan A. N. Kabbara
And
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