2 ms·
ZIRP is a hell of a drug. There's not a lot of innovation to be had on lending that is actually going to be considered legal. Unless they obfuscate it with AI,
by steveBK123 4y ago
ZIRP is a hell of a drug.
There's not a lot of innovation to be had on lending that is actually going to be considered legal.
Unless they obfuscate it with AI, they are going to run afoul of some sort of anti-discriminatory laws.
Credit score&history, income, capital.. go.
Most of what BNPL actually turned out to be was just dumb money.
- mamonster 4y agoIts also the fact that in a bear market / recessions usually most correlations go to 1(on the way down) and whatever risk metric you used previously justify having low default provisions suddenly doesn't work anymore. Wonder whether we will ever see the actual datasets that BNPL founders saw that made them decide it is a safe business. Probably like you said ZIRP,bullmarket delinquency percentages.
- steveBK123 4y agoYes, though they were already taking on serious credit losses before any normal creditors were.
- astrange 4y agoPart of the supposed appeal of BNPL is that if the market gets risky, you have much more choice about how much new credit you can offer, since you're free to offer it per-purchase not per-customer. It makes more sense for a large retailer to run it themselves, though; there's not necessarily any value in a dedicated company selling it straight to customers.