The future of money?
October 28, 2010 | alternatives | Comments (0)I think this Forbes columnist is way overstating the impact that Zest Cash will have:
Enter ZestCash, and its ilk. I recently wrote about this company – it was formed by former executives from Google and Capital One, and aims to take on the Payday lending industry. Payday lenders loan the working poor money, typically for two weeks at a time, at what the industry says is 15-17%, or 391% a year (ZestCash, and some consumer groups, say it’s even higher). That sounds high, but works out okay if people can make the two-week mark. They get nailed, however, in the very common event that they fail to make the payment, and have to continue the loan.
ZestCash, which operates through a website people in need of a loan access, says it can charge less, perhaps 300%, by better economic modelling and better risk management, using Internet-type search of non-obviouis data. They are particularly interested in covering the extended loan customers, who are the most at risk of being upended by short term borrowing.
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