Tony Huang on Possible’s Mission to Do Better
Summary
Each year, the average payday loan customer takes out eight loans—some take out 10, 15 or even 20. These borrowers aren’t mismanaging their money. They’re stuck in a debt cycle that’s designed to keep them there.
In this clip from the Startups 4 Good podcast, Possible CEO Tony Huang breaks down the harsh realities of payday lending in America, and the incentive structures that keep customers from getting ahead financially.
At Possible, we believe financial tools should be designed to help people move forward, not fall behind. That means giving customers more flexibility, more clarity and more chances to build a better future.
Transcript
So the average payday loan customer in this country takes out eight payday loans each year. That's the average. There are many customers that frequently use payday loans today that are taking out 10, 12, 15, 20 payday loans in a given year. And the reality is they're stuck in a debt cycle and roughly half of all payday loan customers are actually stuck in a debt cycle, meaning they're constantly re-borrowing as soon as they repay, and certainly from a business perspective, you will look at this and say, this is exactly what the lenders wanted. This is how they make money. And that's something we found as well. When we looked at this, traditional payday lenders actually had no incentive to help their customers out of this debt cycle. In fact, the business model is how do we captivate this audience and not let them go or let them graduate because that's really how they make money, you know?
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