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Setting up a moneylending business
- Thread starter cityhope
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Who are your target customers?
I am toying with this idea as there is a demand for unsecure loans. Thinking of giving loans less than $1000, payment 6-8 weeks, interests 20%. I think this is same model used by loansharks?? Profile checks will be important to minimize debtors from disappearing.
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Profile checks to minimize debtors disappearing? You are not bank leh.
check ic, confirm address. do what the loanshark does
Tats so out of date liao........ ah longs now want you to show the latest PUB or handphone or hdb bill to confirm you're residing at the address.
You need an insider poodle to access the Crimes2 system for more accurate and up to date information on your debtors......... there are many CID poodles that are willing to provide this service...... some do it for a fee....... some will only do it provided you make them your partner :p
i think loansharks or moneylending is same as any other business. Every industry got customers run away, like contractors refusing to pay after receiving materials; $1 company declare bankrupt.
It is how u manage it and how much u can write off.
It is how u manage it and how much u can write off.
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Of course every industry has customers who run away, but the risk for the moneylending business compared to other industries has got to be at least 20x greater. Hence if you say set up a seafood trading business and out of 100 customers that you have, 1 runs away without paying you, you have to expect that the number for your moneylending business has to be at least 20 out of 100.
Think about it. Someone who buys seafood from you is either reselling it or cooking it as his business. His intention is to do his business and make money. He may fail or he may succeed, but his intention is to do business.
Now consider someone who borrows money from you on an unsecured basis. You have to ask yourself. Why does he need money? Why does he need to borrow money? Why does he need to borrow from you?
hmmm....how does the legal moneylenders survive?
legal moneylenders like the banks and finance companies? they dun charge as high as the loan sharks...roughly around 18% PA. with a monthly min repayment amount of around 3% of principal amt...and late payment fees if you did not pay by monthly stipulated date
