Lasco, MailPac loan partnership seeks to rival big moneylenders
Lasco, MailPac loan partnership
seeks to rival big moneylenders
Managing Director of Lasco Financial Services, Jacinth Hall-Tracey, says the company is projecting 25 per cent growth in its individual loan portfolio under a new partnership with MailPac Services Limited, a subsidiary of Norbrook Caribbean Investment Limited.
Lasco Financial will package and sell 'shopper' loans initially but is soon to add a business product.
As at March 2014, Lasco Financial's individual loan portfolio totalled $130.9 million, up from $94 million the year before.
Norbrook/MailPac head Khary Robinson said his firm will be responsible for marketing the loan products through its 15-store network under the brand MailPac Financial Services.
Customers of MailPac will get up to a year to pay for products bought through the financing plan, which essentially amounts to hire purchase for online shopping.
MailPac also expects to grow sales by 20 to 25 per cent in one year with scope for "much more" over time through the support services of MailPac Financial, said Robinson. The courier company's client base numbers 70,000, he said.
The partnership currently includes the shopper loan, which is capped at $150,000 and priced at 52 per cent per year or one percent per week, and a personal loan of up $200,000 - both repayable in one year.
The business loan will be rolled out in 2015, Hall-Tracey said. Most of the earnings from the service are expected to come from shoppers next year.
Lasco Financial will provide the capital and administer the MailPac Financial Services loans and will share income with MailPac, under terms that the parties have not disclosed.
Robinson said he envisions the service rivalling the portfolio of big microlending firms, Access Financial Services and First Union Financial Group, whose loan portfolios he estimates at around $800 million on average. He says both Lasco Financial and his company are sitting on 'strong' balance sheets.
Access, which is a publicly traded company in operation for 14 years, currently has a loan portfolio of $1.1 billion, and is on track to best the $760 million of interest income earned in 2013.
Lasco Financial, which is also a listed company, earns annual revenue of about $600 million. The company manages $900 million of assets, including a loan portfolio of $325 million and $450 million of cash, and has $172 million of debt.
Robinson's Norbrook group is privately held. Still he notes that MailPac "controls 70 per cent to 75 per cent" of an estimated $5 billion to $7 billion of online shopping spend by Jamaicans, "However, 70 per cent to 75 per cent of the spend is not all with us as some of that spend is with online stores like Amazon.com, eBay.com and Walmart.com," he clarified.
The MailPac shopper loan is to be offered in the form of preloaded cards to be used online. Debit cards are also available, Robinson said.
At 52 per cent interest annually, Hall-Tracey said, the maximum loan of $150,000 will be repayable in monthly instalments of $19,000.
The personal loan proceeds will be paid into customers' bank accounts on approval and are priced at 60 per cent per year or around 1.2 per cent per week.
Hall-Tracey said the rates aligned with offerings across the micro-financing sector.
Robinson said that loan approvals or rejections would be decided within 48 hours and that clients may retrieve their 16-digit, printed card with cash for online spending at MailPac stores. MailPac is working with an independent card printer.