Normally, it can take up to three years for a bank loan to be approved; the borrowing limit is up to HK$1,200,000 or 10x your monthly salary (whichever is lower).[1] Banks also have tightened their requirements at the time of this writing. If you were able to pass the requirements, you will still need collateral to complete the transaction. Mr. Princeton was exploring the idea of becoming a micro-financier for merchants and becoming a loan shark, as he is convinced it is the fastest and most guaranteed way to make money. The model that we wanted to approach was using LoyalPlus itself as a platform, which would create a soft lead into all the merchants. These merchants all need micro-loans because of cash flow. Hong Kong also presents a special challenge to small merchants because there is a law that states that you must pay your workers on time or you face a fine of up to 200 thousand HKD. When payday rolls around, most merchants scramble for funds because the majority of businesses have cash-flow problems. A company such as LoyalPlus can step in and offer a micro-loan; the maximum interest they are legally allowed to charge on this loan is 48%[2], and as long as interest remains below this threshold, it doesn’t count as loan sharking.
[1]http://www.standardchartered.com.hk/borrow/loans-personal-instalment.html
[2]http://www.hkma.gov.hk/eng/other-information/pws-faq/banking-stability.shtml
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Swimming with Asian Sharks - Business Secrets from the Pacific Rim
Non-FictionEver wonder what it takes to do business in Asia? How do Asian business executives behave and think? Do you want to create a business from scratch in under 24 hours? If so, this is your guide. This book is a compilation of over one hundred business...
