Rebirth 79: I opened a bank in the United States

"Wait, what was the annualized interest rate you just said?!"

Carter, who was burying his head in writing about the "Twilight Love Hotel" project, suddenly raised his head and looked straight at the manager of the Black Flag Commercial Bank and the manager of Black Flag Loans next to him. Carter almost thought he was listening wrong:
"Didn't I say, can the interest rate of this small loan be lowered? Now that the federal benchmark interest rate has dropped, it doesn't need to be so high!"

"However, this is not high! It is not up to the usury standards stipulated by Connecticut. Compared with peers, such as payday loans, our interest rate standard is more than 50 percentage points lower than theirs. Of course, this is only in Connecticut. payday loans.”

"That's right, considering that college students don't have stable jobs, our risk rate may be raised a bit higher, but by comparison, I think this rate standard is very reasonable!"

After the manager of the credit company finished his speech, the bank manager also stood up and expressed his support for their interest rate standards:

"The current benchmark interest rate is about 9%, plus the risk rate of 14%, plus the profit margin, this is really not high! Mr. Black, you must know that even payday loans require proof of income, and We don't need it yet."

"Let's lower it a bit. After all, what we're dealing with is the campus market. It can't be compared with payday loans. They."

Carter sighed and said that he was not envious, that was a lie
Which businessman can stand this kind of temptation? !

The average annualized interest rate is 400%. In some countries or regions, the compound interest model can still be used, and the annualized interest rate will eventually exceed 1000%. This profit is not scary!
But payday loans, that thing is not something that I can play now.In the United States today, including the United Kingdom and other countries, the number of payday loan stores on the street is even more than McDonald's.
Just like the small loans in China in the previous life, the fund provider often consisted of multiple institutions, payday loans are also a huge system, and I currently don't even have the qualifications to join this system!
The largest payday lender, Advance America, has more than 2000 stores in the United States; the second largest institution, Dollar Financial Corporation, has about 1300 stores. In addition, it has more than 300 stores in the UK and more than 400 stores in Canada. ; the third largest institution, ACE Cash Express, is the largest check cashing store in the United States, and the number of store terminals in the United States is also over a thousand; the fourth largest institution, Cash America, is a leader in the field of pawn loans in the United States
Counting other zero-to-one institutions, without strong channel support and without huge funds entering the market, payday loans, such a profitable business, are obviously beyond their control.

Doing campus credit business is nothing more than the old saying, taking advantage of loopholes!

"But no one has ever thought about whether its interest rate keeps its default rate high?!"

This conscience made Carter blush a little.
Think about the 23.4% and 23.65% common small loan annual interest rates that I scolded to death in my previous life, but now the 30% conscience!From the perspective of the United States, it is really conscientious!
"Powell, Manning! You know, payday... has actually entered a very weird cycle! You should have studied their default rate, right?"

"Of course, but... I don't understand what you're trying to convey? Payday loans are inherently faced with customers with almost no credit ratings, and their default rate is naturally high!"

Of course they dare not, of course, they don't need it!

"If it's not desperate, who would dare to use this kind of loan? Do you dare? Or do you dare?"

Regulations vary from place to place because of the spread of payday loans.For example, Connecticut has relatively strict regulations and the interest rate is not very high. In order to offset the possible bad debt risks, if you apply for a payday loan in Connecticut, you need to prove your source of income.In states such as Alabama or Mississippi, due to the extremely high interest rates on payday loans, applicants often only need a bank card
"After all, they are old brands. What we have to do now is to use their differences in regional rules to carry out refined market entry. I know that according to the traditional risk model, the default risk of college students is very high, but As a member of the college student group, I believe in their credit! In particular, our loan records are directly tied to the bank credit system. Once they default, they will have a negative record from a black flag commercial bank on their personal credit report , they will not take such a big risk for such a small amount of money."

Their credit is so bad, so I'm going to raise the interest rate!

But almost no one has ever thought about whether this kind of interest rate setting is reasonable.Even if they want to reduce the risk, what is their method?Shorten the repayment period
"They have a huge channel support, which allows them to face countless customers. But we are different. We don't have such a strong channel and so much capital. Our current vision is only the three-acre land in front of us!"

"We have to let our customers dare to come to us for a loan! After using it once, dare to use it a second time! Only in this way, the 6000 million US dollars will not lie in vain and depreciate! From the very beginning, you need to change your thinking , don't always follow the tradition! Especially you, Manning, understand? Our 'Put to use' is a brand new credit product, just like its name, people can take money whenever they want !"

"Don't you think this is a vicious circle? The more it goes on, the higher the interest rate; the higher the interest rate, the higher the risk of default, and then it goes round and round. It has developed to this day, yes! They have a lot of stores, and you can walk to a street I wish there were two or three payday loans stores on one street, but have you ever observed those people who take out loans?"

Carter picked up the cigarette case on the table and threw it to the two
"Because the targeted customers have a high risk of default, the interest rate is high, and the repayment cycle is even shortened. In such a short period of time, any intermediate loan customer who has a little unplanned expenditure will face default. The credit is not good, and then If there is a default, the lender will continue to increase the risk rate, and then it will be more difficult for people to repay, especially after the salary is paid, and there will be no room for a little unplanned expenditure.”

To put it cruelly, the audience for payday loans is almost the poorest poor in the United States.The so-called elites who specify such rates will always only believe in their theoretical models:

"So, I think the risk rate can be lowered! Let's lower it by another 4 percentage points. The annual interest rate is designed at 30%. You also know that college students do not have fixed jobs, and it puts too much pressure on them to pay. To be honest, it is too cruel! The channel, the total amount of funds, and even the popularity are not comparable to the largest payday loan in the market today, the only thing we can do is word of mouth! A word of mouth of a conscientious loan!"

For this sentence, the two managers who asked directly were speechless.

"Okay, go out and think about what I said first. 30% is the result of my compromise. From my subjective point of view, I think this interest rate is too high! You can discuss it later, and it will be later Give me the plan."

"Powell, you stay here! What's going on with defense stocks?"

emmm, it's been a long time since I chatted with you guys.First of all, I would like to thank "Little Flying Cat 001" for the New Year's reward, combined with some previous scattered ones, add more!Must be updated!

Secondly, I would like to wish you all a happy new year again. I hope that in the new year, everyone can achieve their wishes and succeed in their careers!

Of course, in the current market environment, conservativeness may be more important.I recently read the annual reports of some organizations, and they are generally pessimistic, but our life should be full of optimism~
The last few chapters are transitional chapters, and we are about to enter the next big chapter, which is to use Yale as the starting point, use this platform, and take advantage of the policies of the times to grow rapidly!
Finally, thank you for accompanying me all the way to this point. This is really the longest article Raf has written so far, hahaha~