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I was thinking this very thing yesterday as I walked down the street past a payday loan shop. I see no reason one couldn't open their own competitor with slight
by jkaunisv1 12y ago
I was thinking this very thing yesterday as I walked down the street past a payday loan shop. I see no reason one couldn't open their own competitor with slightly lower rates and then ratchet down until you're just profitable enough to continue while giving the best deals to the people who need it.
I feel like it's similar to how credit unions do what banks do, but in their customers' interest rather than the owners.
- otakucode 12y ago> I see no reason one couldn't open their own competitor with slightly lower rates You would have a very difficult time attracting customers. Ignoring the fact that much of the payday loan industry is run by organized crime and you would likely end up with a bullet in the back of your head, even if it were totally safe you would get very little advantage from offering a lower interest rate. Studies have shown that people in economic trouble are not capable of making wise choices. It's commonly referred to as 'decision fatigue'.
- jkaunisv1 12y agoI have no knowledge of who runs the industry, but assuming it's perfectly safe - I'm not looking for an advantage. I'm talking about a social enterprise that disguises itself as a sleazy payday loan place, same kind of branding and everything but with more favourable terms for the customer. I'm guessing geographical location is the biggest factor in influencing their 'choice' of payday loan shop to use, so it would be a matter of taking advantage of that decision fatigue to help them without them realizing it.