Loan repayment fail rates and other banking woes.

[Most Lee Harmless]

I pulled out of making loans a while back, feeling there was a very poor return rate on them, given the persistent fail rate. A few weeks back, I decided to try again : so I made a point of offering new players reasonable rates for small loans : all told, I made 33 loans : to date, 7 have defaulted and 2 more look like they are heading the same way. That 9 out of 33, which is pretty poor going indeed.

Now, it can be argued my nation loan insurance has paid out, which is true, but not the full amount due : and why should it? None of the defaulters were in my nation, so why should it have to subsidise loans to them? Whatever, it would seem that to continue to offer such loans will have to be put under the 'public service' heading, a loss borne for the good of the game. But why should bankers do that?

I know the devs wish the banks to play such a role in helping new players to get started but again, why should they have to bear that risk of expense? Where are the great earnings to be found for bankers? Credit exchanges? After spending several billion levelling up the bank, you too can dip your toes in those waters, but looking at the paucity of trades on offer from those banks that are qualified, the credit exchange notion is a bit of a dead duck and hardly justifies spending a million in its pursuit, never mind a billion. Frankly, if my bank ever gets to level10 its because I need the space to store my own gold, no other reason seems to be profitable in any way.

I think, if the devs want the banks to help fund new players out of their own pocket, then the banks will need some form of income to support that without having to spend those billions to play at the top end of the sector.

[Meliva]

I pulled out of making loans a while back, feeling there was a very poor return rate on them, given the persistent fail rate. A few weeks back, I decided to try again : so I made a point of offering new players reasonable rates for small loans : all told, I made 33 loans : to date, 7 have defaulted and 2 more look like they are heading the same way. That 9 out of 33, which is pretty poor going indeed.

Now, it can be argued my nation loan insurance has paid out, which is true, but not the full amount due : and why should it? None of the defaulters were in my nation, so why should it have to subsidise loans to them? Whatever, it would seem that to continue to offer such loans will have to be put under the 'public service' heading, a loss borne for the good of the game. But why should bankers do that?

I know the devs wish the banks to play such a role in helping new players to get started but again, why should they have to bear that risk of expense? Where are the great earnings to be found for bankers? Credit exchanges? After spending several billion levelling up the bank, you too can dip your toes in those waters, but looking at the paucity of trades on offer from those banks that are qualified, the credit exchange notion is a bit of a dead duck and hardly justifies spending a million in its pursuit, never mind a billion. Frankly, if my bank ever gets to level10 its because I need the space to store my own gold, no other reason seems to be profitable in any way.

I think, if the devs want the banks to help fund new players out of their own pocket, then the banks will need some form of income to support that without having to spend those billions to play at the top end of the sector.

I know they plan to add a tech to help with loans, but a tip to any bankers, I follow 3 main rules when it comes to loans I give out. 1. never give out an amount I would regret not getting back unless I'm positive it would be repaid,(losing 50K no big deal). this leads to 2. never give out large loans to newer players, half of them will quit honestly, but its a bit safer to give out loans to older players. and rule 3. remember the ones who are diligent of paying back loans, those are the ones you should remember.

i think a good addition to the game, would be a sort of bankers forum in game. where bankers can post trustworthy people to loan too, and people who are not trustworthy. granted since there are so few bankers it wouldn't be very beneficial to most people. id still like to see it honestly.

[Most Lee Harmless]

The rational conclusion is 'Don't give out a loan to anyone who might need it, especially a new player' : but the game wants banks to support new players with loans : a laudable aim but impractical unless the bankers are happy to write off those loans the moment they are taken up, all as part of some social service to the game itself. I thinks its fair then to ask the devs just what form of incentive is there for us to do that? At present, none. There isn't even the means to earn coin thru the bank to cover such losses, nevermind the banks actual build costs, not in 20 years of playing. Thus, I do think it fair for the banks to just say 'No' to such notions and stop wasting our time and treasure pretending such a scheme is ever going to produce a reasonable rate of return.

[Meliva]

The rational conclusion is 'Don't give out a loan to anyone who might need it, especially a new player' : but the game wants banks to support new players with loans : a laudable aim but impractical unless the bankers are happy to write off those loans the moment they are taken up, all as part of some social service to the game itself. I thinks its fair then to ask the devs just what form of incentive is there for us to do that? At present, none. There isn't even the means to earn coin thru the bank to cover such losses, nevermind the banks actual build costs, not in 20 years of playing. Thus, I do think it fair for the banks to just say 'No' to such notions and stop wasting our time and treasure pretending such a scheme is ever going to produce a reasonable rate of return.

loans can generate some income, but only if you find people who actually pay them back. I think an idea that would make banks MUCH more profitable, is to add interest to it for bankers storing gold.
ex.
level 1 bank=1% interest a day, and each level afterwards adds another %.
so a level 1 bank, at 50M deposited, you would earn 500K.
a level 20 bank at 50M would earn 10M.
of course this would need to be revised in a way to keep it balanced. my example is just a basic idea, and not what I think the percentages should be.

[Sebena]

apart from upper suggestion let me return on previouse post of yours meliva, bout your rules well they can apply but they can fail aswell for example I had player taking 3 loans from me and repaying them fully all were relatively small then that same player asks me loan which is far bigger than previouse together... my logic guided me twoards sending him offer in hope that he'll retun as previouse and as you can already conclude yourself it didn't I lost nice ammount of gold and after that I decided I am not responding on any loan offer...


To look back at last post about that suggestion that would be great addition but it should be restricted because there are ways to exploit it on huge scale... maybe restrict it on some ammount which would fall under those intressts...

[Meliva]

apart from upper suggestion let me return on previouse post of yours meliva, bout your rules well they can apply but they can fail aswell for example I had player taking 3 loans from me and repaying them fully all were relatively small then that same player asks me loan which is far bigger than previouse together... my logic guided me twoards sending him offer in hope that he'll retun as previouse and as you can already conclude yourself it didn't I lost nice ammount of gold and after that I decided I am not responding on any loan offer...


To look back at last post about that suggestion that would be great addition but it should be restricted because there are ways to exploit it on huge scale... maybe restrict it on some ammount which would fall under those intressts...

I am aware my rules can fail, you can never know if someone will pay or not. but having some guidelines like mine, I believe help reduce that chance.
and yeah the interest idea in my example is very exploitable, but I think with some revision, it could be implemented in some way. but danik is right, I think banks should have more ways to profit. the main reason I built my bank is a place to store my gold. the loans is just a bonus, I don't give out many loans. and it costs SO much just to build a bank. 100 creds each level, just to get to level 10 would cost 1K creds. that could buy quite a few voodoo, or a fully leveled MOW with some left over.

[Knight Orlong]

I'm not a banker in PG, but I know a bit about loans.

I suggest the traditional way of issuing loans in the first place: let the loaners hand over a piece of property as security and then issue your loan.

[Crackedcubes]

Quite simply, we need collateral! Those seeking loans must give us a reasonable amount of collateral, such as 80% of loan value locked into their ships and/or bank accounts or maybe even voodoo cards. With larger loans requiring more substantial collateral value, such as credits. That way if they default, we take possession of the credits /gold or ships. Obviously same thing as Knight has said.

Until Game Admin gives bankers the ability to tie up collateral, I think loans are sunk, except in the case of players within your particular guild that you know very well!.

[Crackedcubes]

Quite simply, we need collateral! Those seeking loans must give us a reasonable amount of collateral, such as 80% of loan value locked into their ships and/or bank accounts or maybe even voodoo cards. With larger loans requiring more substantial collateral value, such as credits. That way if they default, we take possession of the credits /gold or ships. Obviously same thing as Knight has said.

Until Game Admin gives bankers the ability to tie up collateral, I think loans are sunk, except in the case of players within your particular guild that you know very well!.

[Meliva]

Collataral would be a great addition. I think they said that the loan shark tech would enable that. personally, I think it should be available without needing to invest even more.