We Mustn’t Forget Old Techniques
As someone, who grew up in a letterpress printing works in Wood Green, I welcome stories like this.
Abelardo Gonzalez has developed a font for those who suffer from dyslexia and it seems to work.
I don’t suffer from dyslexia, but I do have slightly sub-standard eyesight and know that reading some fonts is easier than others.
Transport for London would also agree, as years ago they developed a special clear typeface for travellers called New Johnston. It’s even on the destination boards of buses.
I also think that I do better in eye tests than I should, because of all that time I spent setting up type and especially the very small ones like 6 pt. I think sometimes my father gave me those pieces to do, as my eyes and dexterity as a child were very good.
Some Financial Ramblings About Wonga
I’ve never liked Wonga, ever since I saw a presentation of it at an Internet awards ceremony a few years ago.
There is an article in the Sunday Times today, which gives a few figures about the company. It apparently lent £375m last year and has made a debt provision of more than £66m. Or about 17.6 %.
That is a high figure and is totally out of line with good, well-run and profitable finance companies. I used to part-own one and our bad debt ratio was if I remember correctly about five percent. Which was well below the industry average at the time.
I also have my own figures from Zopa, where I invest money to lend to third parties. My bad debt to invested money ratio has never exceeded one percent. But I do have a fairly conservative lending policy.
I have done extensive financial modelling in the area of finance companies and like to think, I know why well-run ones make a lot of money.
The first rule is to only lend to those with good credit ratings. Here, Zopa and Wonga are two very different animals.
Zopa creams the top of the market, acts like a normal finance company to borrowers and cuts its investors in on the deal. In fact, I wonder how many Zopa borrowers think of Zopa as a cheap source of finance with excellent terms and conditions?
Wonga on the other hand is a bottom feeder, targeting those with problems and might well look like a loan shark to many possible customers.
Other lenders like say Nationwide, Lloyds and the other reputable banks and finance companies are closer to Zopa, but probably not as much as they’d like to be.
The second rule is making sure that borrowers keep their payments up. Wonga don’t seem to be doing this judging by the bad debt ratio of 17.6 %, whereas Zopa is probably much better than the average for a reputable bank or finance company,judging by my experience. My ex-partner in the finance company feels that the Zopa figures are better than any he’s seen.
Wonga’s model is different to any other finance company. Banks and in effect, Zopa, get their money back over a period of time, typically measured in months or years. Whereas Wonga, probably gets it back in days, so the money goes round and round in the course of a year. Or it should do!
You might consider that Wonga is a money rental company, rather than a lender. Even if it is one of last resort.
At present the Wonga model seems to be working, with a profit of about £26 on each transaction, of which the average size is £150. The Sunday Times doesn’t give the average length of each loan. Estimating what a typical reputable company might make on each deal, it looks like Wonga are really making quite a bit more money!
But there are two sides to every financial equation; money in and money out.
We ran our finance company on a very lean basis and if you are reputable and you get the business you need to grow the business as you want, then you don’t really need to spend too much money on things like advertising or promotion, as your customers do that for you. Even the banks don’t spend much on promoting their loan services! But they are uniquely placed to sell their loans with a big branch network.
Wonga are really spending it, judging by the adverts and the sponsorship you see. Recently, it has been announced that they are pursuing a sponsorship deal at Newcastle United. Remember that the world of personal finance is littered with companies that thought they had a better model, but in fact didn’t. I’m old enough to have seen quite a few!
Wonga’s financial model seems to rely on putting your name in front of as many mugs as you can to carry out its bottom feeding.
If you compare Wonga with any reputable finance company, it would be unlikely that the latter would fall into trouble over its borrowers, as it would probably treat them fairly and respectfully. Using Zopa as an example, it only lends to those with good credit ratings, makes no charges to those, who don’t get loans and generally charges a lower interest rate.
Wonga too, has already aroused the ire of some politicians like Stella Creasy over its policies and high interest rates. Politicians it should be said, need easy targets, like bankers with huge bonuses and payday lenders. Wonga in particular is a very easy target.
My financial modelling experience though does lead me to an important conclusion.
Wonga’s model will only generate profits, whilst there is a large pool of willing borrowers. At present there are obviously enough, but as more and more suffer because of defaulting to Wonga, will the general public get the message that has been preached by the papers, like the Sun here and learn to use alternative sources of credit, like credit unions. Or in fact will they, just manage their finances better?
I gave the example of the Sun, as it is more likely to be the paper of choice of a possible Wonga borrower. On the other hand, there are some nice pieces about Wonga in the Guardian, the Telegraph, the Mail and the Mirror It is also interesting to read some of the comments on a report of the Newcastle United sponsorship deal in the Newcastle Journal.
There is another big difference between the model Zopa and other reputable banks and finance companies use and that of Wonga. The former rely heavily on personal recommendations from satisfied customers to get business. Wonga would probably like to too, but with their high admitted default rate, the number of recommendations would be lower, especially if you’re being chased by them for the money.
So this all makes me think that at some time, Wonga will be unable to sustain the current growth. Especially, if legislation to limit their interest rates of over two thousand percent was passed by parliament.
I wonder whether they have already found the limit to growth, given the Newcastle United deal and the fact that the annoying bus adverts in London have reappeared in large numbers. After all what is a shirt sponsorship deal, but getting your company’s name in thousands of places on the street. If you are selling a quality product like say Emirates, Samsung, Standard Chartered or Waitrose, it doesn’t probably matter having thousands of football fans promoting your brand, but if you’re a payday lender, it might just be counter-productive It would be very informative to read a learned paper on the effectiveness of shirt sponsorship.
Now Lloyds And The Co-op Drop Us In It
Captain Mainwaring would not have been amused, as yesterday Lloyds and the Co-op seem to have had system errors, or as I prefer to call them programming bugs, in their computers. It’s here on the BBC.
It may have been unrelated but one of my credit cards wouldn’t work on-line yesterday and they asked me to phone them. They said they were just rebooting the computers, and it should be OK in a couple of hours. Do we reboot computers, as we generally give them a good kicking first?
World Porridge Making Championships
I don’t think I’ll mind missing this, as porridge isn’t my favourite food.
But I suppose it brings the tourists to the Highlands. Especially, as it says this about Carrbridge in Wikipedia.
In 2009 the village took on the BBC claiming that the Corporation constantly got the weather wrong which was putting off tourists. Local businesses claimed that BBC weather reports on television and on their website constantly reported rain despite there being no rain whatsoever. Locals stated that the BBC generalised the weather to “rain in Scotland”. Carrbridge became a minor celebrity with the story appearing on national news networks and the quiz show Have I Got News For You.
It does have a station though. However, it would appear that direct trains from London don’t run, although on Sunday there is a direct service to come home. You have to travel via Glasgow or Edinburgh. Perhaps, it’s a plot to keep the Sassenachs out?
The Silliest Legal Case In The World
The BBC is reporting that the Naked Rambler has been released from prison. He is now walking somewhere around Scotland in the nude.
It must be the silliest legal case because it’s been going on for years now. The article contains this comment.
John Scott QC, chair of the Howard League for Penal Reform in Scotland, says the bill to keep Gough in prison for so long must have reached hundreds of thousands of pounds. It costs about £40,000 a prisoner a year, rising when an inmate is separated from others, and when he is repeatedly discharged and readmitted.
It’s funny, but why was he not arrested in England, but is having so much trouble in Scotland?
Perhaps he could be persuaded to walk somewhere else like North Norway or the Sahara Desert. Now that would be a naked challenge!
Or could the Scots not deport him to England and ban him from going north of the border!
What Do We Do With The Henry Moore?
Tower Hamlets council have a problem about what to do with a Henry Moore sculpture that they own. It’s all here on the BBC.
In some ways, the problem has been brought on, by the success of public statues. Look at most big stations these days and they have large sculptures. St. Pancras has two. So there are a lot of them about and because many are made from valuable bronze, they are just too tempting for thieves. But I’ve never heard of one being nicked in even a moderately-sized railway station, as the security is just too high. Or even it actually isn’t high, railway stations tend to be busy places with a good mobile phone signal and someone would probably call the police.
So perhaps, one of the first places to place a valuable statue is in a suitable railway station. but there are only four stations in Tower Hamlets. Only Shoreditch High Street station would probably be large enough. But it would probably be impossible to place a very heavy sculpture now, the station is built.
So it’s a real problem.
A practical idea might be to keep it indoors in a special museum, paid for by the money, that would otherwise be used for insurance. I have a feeling that some of the famous statues in Florence and other places in Italy have been moved indoors, not to protect them from vandals and thieves but the weather. This happened to Michaelangelo’s statue of David.
But whatever happens, we must make sure it is not stolen and melted down.
Jimmy Savile
Everybody seems to have it in for Jimmy Savile these days.
I won’t defend him, but as the guy is now dead, and no recompense can be made from the man or offences charged, surely it is one of few cases, where to let sleeping dogs lie, may well be the best thing to do.
There have been similar cases in the past, including murders that might have involved a much-loved and dead at the time boxer. These have been forgotten by most.
But the bigger you are, the more likely it is, that the tabloids and the general public will want to cut you down.
I saw Jimmy Savile once walking down Portland Place by the BBC, with a big cigar clamped in his teeth and a couple of blonde young ladies about twenty or so on his arms.
Are The Best Ideas Started In Garages?
The storage of electricity has always been a problem and it’s one that will get worse as we get more renewables like wind-power, that tend to produce electricity at variable times.
So this article on the BBC web site caught my eye. I particularly like this bit.
The technology was originally developed by Peter Dearman, a garage inventor in Hertfordshire, to power vehicles.
Just like Hewlett-Packard, which started in a garage.
What is the most significant fact, is the IMechE have got involved.
This might be one of those ideas that runs and runs.
It has a lot of things going for it.
- It’s all technology we have had around for years.
- It doesn’t require large amounts of land.
- The plants could also be used to say produce liquid carbon dioxide, nitrogen or oxygen, where they are needed, instead of bringing it in by tanker. On the other hand liquid oxygen is dangerous stuff to have around.
I shall be watching this story in the future.
Who Needs 4G?
I was one of the first users of a mobile phone, many years ago. Today, the BBC are reporting a big meeting about the next generation, 4G
But I have not even got onto 3G, just staying with a good old-fashioned phone; a Nokia 6310i, that gives me text messages and calls.
The only thing, it cant do that I need, is put up a skeleton topic on my blog for editing later when I get home. If I needed to, I could tweet from the phone.
4G is only a way to get more money out of the gullible.
The Anonymous Widower 