Since a blog post is well overdue, with indicative distractions from posting to follow, I thought it time to scramble an attempted summary of events of recent weeks.
My day job using Coethica to encourage CSR in the world of smaller businesses often introduces me to incredibly passionate, innovative and challenging business ideas and entrepreneurs. The past couple of months have been especially fun.
Two new clients in particular ticked all the above boxes and at the same time threw me deep into the wonderfully perverse world of financial services.
What can I say, apart from Peter King? I’ll tell you more about Ethecol at a later date but suffice to say a truly great concept for a social enterprise born out of a typically uninspiring financial services offering. Coethica’s market is primarily non-social enterprises but every now and then an exception needs to be made. Most social enterprises are created by people attempting to solve a social or environmental problem and in 90% of cases then struggle to build a commercial revenue stream to serve their cause. Ethecol is different; they’ve taken a traditional business model and added a huge side order of social benefit.
Ethecol provide merchant services (credit / debit card payment terminals and online payment services) whilst giving all of their transactional revenue (each time a card is used for a payment) to good causes. The banks have had their own way in a stagnant, complacent market to for too long. Robin Hood Peter King’s journey of ethical awakening already deserves credit for at the very least beginning to ruffle the feathers of the overweight financial parasites that continue to bleed our society of much more than finance.
At Coethica we never set out to take the easy route and have a track record of looking for businesses that challenge our own understanding of what CSR is and can achieve at SME level.
Dosh Shop is on the edge of this category. If I described the business as a pay day lender I’d expect at least some negative reactions from many amongst responses including terms such as loan sharks, astronomical interest rates and mercenary fees. Obviously Dosh Shop is different, or they’d never got past our front door. This small family based business is aiming to acquire a small piece of a rapidly growing market for short-term consumer loans by leading on strong ethical values, affordability and complete transparency (even against banks wishes).
Through our own research I’ve been amazed at how the so-called reputable institutions have manipulated terms such as APR (Annual Percentage Rate) and interest rate to suit their own needs. For example, many short-term loans are quoted as having APR’s of two or three thousand percent. True, but over a such short periods of time, in many cases days, this is still only 10 to 30% of the original loan amount, whereas UK mortgages are advertised as having low APR’s circa 5% but in practicality require a total payback of 100% of the original loan. Go figure.
Another great argument on the side of the better players in this market, and there are rogues playing the game don’t get me wrong, is that Dosh Shop for instance are working on a financial model based on a 20% profit margin. Most high street retailers wouldn’t entertain anything below 30% but derisory shouts of profiteering aren’t laid at their doors?
The lack of effective financial literacy education, especially for younger people has become glaringly apparent by its absence, with only a few shining lights such as MyBnk offering any credible ray of hope in a world almost bankrupted by financial inadequacies.
Distraction numbers 3 to 103 (at least) included everything from book reviews, exciting new business opportunities, a handful of good causes, and replaced internal wall at home!
I’ll be back on track with more regular posts with more insights into the recent challenges and an exciting future.