Credit

Charles Cormier
2 min readJul 7, 2023

how to credit makes money -> they use collateral if you don’t pay back so they have a guaranteed ROI from the get go. Now there might be a fleeing risk, so they evaluate the probabilities of that, and come up with strategies to avoid that. Knowing your close ones, where you live, your roots, etc.

so, while minimizing risk of not being paid, they charge interest. then’s left the last part, amassing piles of cash to finance you: that’s easy, they have investors. And voilà, you have a credit business, one of the best and easiest business there is.

in mexico, you’ll see a lot of those. why? because ppl have problems amassing great large of money. there’s also this trust issue, plus the fact that ppl here are just less reliable (less punctual).

the water guy might take a loan for his pickup truck, eating his profits margins. the sad thing is that the very thin profit margins that they make is eaten by banks. hence they essentially buy themselves a job for the rest of their lives, they are their own slaves. everyday carrying heavy water and earning probably 150 pesos profits per day -> 15$. getting injured one that and just like that, they’re in deep trouble.

some of these businesses are quite predatory. the smaller the more interests they’ll ask for. miss a payment and we’ll charge you double interest. Or upfront we’ll loan you 1000$ and we’ll ask for 2000$…

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Charles Cormier

Entrepreneur, Co-Founder, Coach, Speaker, Futurist, Endurance Athlete, Husband, Friend, Monk