4 ms·

It's nice to think there is a large untapped market of people who are ignored by traditional lenders, who have old-fashioned ways of measuring applicants and ov

It's nice to think there is a large untapped market of people who are ignored by traditional lenders, who have old-fashioned ways of measuring applicants and overlook people who don't fit the traditional mould. There are a lot of important points in the thread, such the difficulty of enforcing terms compared to traditional loans, and the amount of cash needed up front which can only be made back over time -- but solving those problems wouldn't fix the fundamental problem that it's hard to succeed in lending when your target market is comprised of people who are unlikely to pay you back. The ISA startups learned that the traditional lenders were right, including in their use of credit scores to evaluate applicants -- a lot of people ignored by traditional lenders really just aren't people you want to lend money to.

danielmarkbruce 5y ago
> It's nice to think there is a large untapped market of people who are ignored by traditional lenders, who have old-fashioned ways of measuring applicants and overlook people who don't fit the traditional mould. True. I'm amazed that this line resonates with anyone, ever. Banks will take every cent they can get, the idea they are just leaving money on the table is... not backed up by history (see 2000s house lending....) Credit is available in crazy high amounts to anyone who can pay it back. There is a large market who are usually ignored (but not always...) - people who need money but cannot pay it back. That is a social issue to solve, but it's not going to be solved by a for profit finance company.