Its now four years since I gained the confidence to start lending money and five years since my first blog post. Alot has transpired and alot has been learnt. This is my story on the nature of borrowers that i have dealt with over these four years.
The Character driven:
I have learnt that much as character is the base from which you can lend money, it comes in limited quantities. Identifying people who have character to pay back is a torturous task but very rewarding if you can condense it to a science. I have learnt that you need alot of money to satisfy this debt driven world. I have learnt with this group of character valued customers, you don't need collateral before you proceed with any transaction. My earliest customers are still with me. They are character driven and still don't keep any collateral with me. That's how trust worthy they are. And they are a joy to work with. They make you love the reason you started the business.
The Negligent:
This group of customers have the ability to pay but are negligent in their obligations unless prompted with a reminder or a threat to sell of the assets staked. These guys are an interesting bunch. They do not disturb you during your assessment process. However they give you confident answers when payment is demanded only to become no-shows. Persistence is the name of the game you play here when dealing with this group of people. Consistent, persistence reminders and a threat to sell their properties are what get them to get serious with payments. They are people you don't want to prioritize if your busy with other clients because of the energy your forecast to expend when time to recover money gets due.
The Charlatan:
This is a group that gives you your first lessons in getting swindled of your precious cash. They actually don't disturb you in the loan assessment phase. Your lessons begin the day they get due for payment and are nowhere to be found. If by luck you do happen to find them, you will learn the true purpose for the loan they took from you was to run away from all the loan sharks and money lenders chasing after them. Theirs is a life made for the cinema. Full of juicy action packed scenes of how they weave one lie after another and the near death escapades they experience make for an interesting life as seen from a spectator's stand point. Its not fun to lose money to these guys.
The Cheaters:
This group annoys you after several transactions. They are good borrowers for the first ten transactions before they unleash their inner demons. They can claim (usually without any evidence) that your cheating them. They will claim to have paid all the money, even when all records show that they are not half way in paying off the original principle. Pressure, threats and lots of swearing with a readiness to take the legal route will induce them to pay at least the money they took. This capital collected from cheaters is dead capital.
The Vampires:
You never want to watch vampire movies as a child. Nightmares after watching these movies will only go away with the faith that God will protect you from the undead ones.
In the business of lending money, you need the cash vampires. They keep the wheel rolling. You need cash next to your bosom to deal with these creatures. They will never complete a loan payment before taking out another. That will be done while they are still operating five loan accounts. It seems dangerous. However, they are always in a cycle of borrow and pay,borrow and pay. They have so much running in their lives and are always actively looking for money and doing alot things. You need a few cash vampires for your business to have some activity.
The Annoying:
This is a group that makes you want to own a gun and a gun licence. They borrow money and never pay a single coin. If they do, its a negligible payment. Theirs is a life of excuses why they cant pay you back but they give you the greatest pressure in getting you to loan them money. The form of execution required here is to try as hard and as long as possible to get your original principle. They are another source of dead capital.
The Principled:
You will only see these guys the day they need money. They inform you in advance because they work according to their cash forecasts. You may see them once or twice every two years and at particular times of the year. They are almost predictable.
The Impotent:
The impotent are guys who take a loan when they have the capacity to pay back only for that capacity to vanish. This means no amount of threats will yield anything except suicide of the borrower. You want them to remain alive so that when their capacity to pay back is restored, you can remind them of your presence with a demand notice. Their money is dead capital since all you are collecting will be a negotiated amount.
The Cash Cow:
This is the ultimate customer. The one who borrows and pays on time. The one who does not disturb and is consistent with his character and his/her loan is collateralised. Along with the character value driven customers, they comprise the quintessential goose that lays the golden eggs. They are a joy to work with. They keep you in the game slightly longer just when you think you have had it with people. They are a treasure you keep hidden for yourself.
