I've enjoyed it so far and it's a good thing he's doing, but what he did at the end was a bit lazy; handing cheques over the counter of whatever national charities have outlets on Burnley high street is a pretty ineffectual way of donating, it would have a greater effect given to some local charity that can't afford a shop rent.

You can always tell someone who doesn't have an argument because they resort to personal insults, I am sure that you can do better.

Exactly what I was thinking.

Didn't they say at the end of ep2 that 98% of the borrowers paid on time?

I wonder what the statistics would be nationwide if the banks lent abit more.

Even if television were not involved, you are not going to set up any business, never mind a bank, with no capital. Some businesses do very well indeed just lending and not taking deposits at all, as I am sure you know.

Even though television is involved, it does not mean the business does not work, you could hardly get better advertising. So it costs you £9,000. Cheap, I would have thought.

Okay then, tell us all how it works????

The way I see it, in your scenario;

If I have £1m to set up my bank, I lend it out and make no profit, where is the business??????

That's called a charity not a bank.

I am happy to be corrected.

So lending money to a sub prime market and making 8.9% gross margin sounds like a solid business plan?

it's a real shame this thread isn't in the business section.

By definition sub prime market is the one the banks won't lend to.
His relpayment rate was based on a very short period of time , he'll only know what it actually is when all his loans have been replayed.

It won't be 2%

you could call it £9k or you could call it 100% of his "potential" profit.

I hate repeating myself but it's not profit until all his loans have been paid off.

And yes it is sub prime by definition.

IMHO he gave the money away because.
1. yes it is good publicity
2. He didn't need it
3. He wanted to show that banking could be about more than just making money for shareholders and bankers.


I' happy to stand corrected, but no one has shown how this can be made into a long term viable business.

It doesn't matter how he worked out that it was profit, it was £9000 from his pretty deep pocket for £1m worth of free publicity and goodwill. So forget the £9000.

I would have thought that if you can lend at 9% and take deposits at 5% there should be a margin depending on the level of overhead and bad debt. None of us really knows whether his business works or not, so none of us can prove it, but he is at least open and trading, and time will tell.

What he is doing as I see it has nothing to do with subprime lending. The big issue which many of us and I for one have with the big banks is how they judge whether to lend to a particular applicant or not. Their headline borrowing rate is also 8.9%, no coincidence, but the difference comes when you try to borrow money at that rate. Most people as individuals can certainly not if they are working part time or on contract which is increasingly the case. What the banks do is set policies from on high which relatively inexperienced and overworked account managers apply often without regard to the actual facts of the situation. That is no way to define 'subprime', and that is the problem. What Dave does, or appears to, is sit down with the potential borrowers, look at their position in detail, and judge whether to lend them money. That is the correct and best way to do it, and the way most banks did it in the past, but not now.

I earnestly hope that he succeeds, because the big banks right now are just vampires drinking the nations economic blood, and it can't go on.

I can't let that go. It does matter how it was worked out. The bank of Dave is no different from any other business - it needs investment to begin trading. It's irrelevant whether or not it came from Dave the whole of the point of the whole of the show was that others cannot get that very same investment to work up their businesses. So I can't forget the £9k No business invests whatever it was £100k, £250k etc. in six months, produces £9k at the end & says look at us, we're a success! It's a long haul & it's lent finance that underwrites it.

I accept that Dave is promoting a wider agenda than simply to see if a return to old fashioned banking values will serve the community better than the automated behemoths we have today, but underlying it was the central principle that you have to speculate to accumulate & there's more than one way of doing it.