Besides the fact that it is THE luxury event of the yearMay 27, 2015 9:48
Take a loan, do not go to jail
Sometimes, the simplest ideas are the best. Like, for instance, not going to prison after you take out a loan.
February 24, 2011 1:52 by Samuel Potter
Fortunately, someone at finance company Gulf Finance had a really good idea. They created a new product: a jail-free loan. Named SME Advance (it’s for small and medium businesses, obviously), it’s as simple as it sounds – you can take out the loan, and if the worst happens, Gulf Finance won’t hound you until you’re imprisoned.
“Since it was soft-launched in January, we’ve had over 400 applications,” said Steve Williams, CEO. Gulf Finance has a Dh2 billion loan portfolio for SMEs. “This is the start of something that needs to come. If you’re in business, particularly in a small business, then you need to be courageous. If that does not work, it shouldn’t be a criminal offence.”
“In finance, you build a relationship. If the client is unable to pay, then you agree on terms to extend the finance or reduce the amount of monthly payments.”
It seems so obvious, but then, the best ideas always do. I just hope now that Gulf Finance continues to have great success with the product, and that other lenders take note – it could be that a step-change might take place across the finance industry, and all without UAE law even having to change (which can be a notoriously long process).
As Smith explains, it makes perfect sense. “This is not about penalising people who can’t pay but building an environment where if your business doesn’t succeed, then you should be given a chance to repay or get back into the job market … we structure a loan in a way that allows you to repay the loan over time — rather than having to run away from the debt.”
Simple, brilliant… game changing? We’ll be watching closely.
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