SL Creditors and in-game Credit Ratings

I'm thinking of starting a service that loans the amount of a weekly payout before they get that week's payout (allowance?) Basically a payday loan service with small service fees. The whole idea would operate on the idea that rather than using RL money to get enough L$ to purchase something, you can get a short-term loan and then pay it off plus a small "service fee". If you know of someone else that is already doing this, let me know also.


In order to not loose out when people do not repay their debts, I was thinking of starting an in-world Credit Rating Database. At this point I think it could just be a web application that simply has a secure Database backend and only "banks" can log on and VIEW CRs and an even smaller number of trusted residents can add data. This would allow a record for each transaction (loan, etc) for each person in the DB. This way, you do not just have a credit rating number, but when your "credit profile" is viewed, the viewer has access to WHY the credit rating is the way it is. It would be like the ebay(R) system, except it would have more information (chat logs, IMs, emails, etc).

The reason why I am posting is I want to get the best "trust" system possible and want ideas as far as what would keep lendees "in line" and consistanly pay back debts.

Join Date: Jan 2006
Posts: 1

How are they supposed to pay you back without buying L's with their RL money? Since you have those fees and all. Or is this like check n' go, where they trap your ass into a cycle of borrowing to cover last week's debt?

I hate Check N Go.
Did you know service fee's can have service fee's? And fee's for those service fees. And more fee's for getting too many fee's.
I gueths thaths a fee fee?
I hathe fee fee's. *hicthp*
Merry Newyearthss!

In reply about being "caught" in a debt loop...

I was thinking the majority of people would have 40L$ and wanted to buy something THAT WEEK for 65L$, so they get 50L$ from me, then come Tuesday, pay back 55L$ - the extra 5L$ would come from the extra 25L$ left over.

I was wondering if I should make it totally non-profit and just take collateral, but then how can you appraise something and know it's market worth easilly? I couldn't take junk that the makers said was worth xxL$

Thanks for the replies, keep 'em comming! What a great community!

To be perfectly honest, it seems that most banking-type industries in SL have either played out or never managed to coalesce. I don't know the full reasons why, but I suspect it's because it's so easy for people to just buy all the money they need in world if they're serious about an investment.

That said, if I were going to run this service, I'd only loan 90% of what a person's expected stipend is. So if my stipend's $50L, you would only loan me $45L and ask for $50L in return.

Next, besides your credit database, how do you plan to make people pay you back? Again, to be honest, you do not have any in-world credibility at the moment, although that could change with a lot of hard work and precedent. But if you came to me next week and informed me that Avatar X has bad credit, I wouldn't know you or trust your opinion. Because of this, you should be prepared to take a heavy beating in the beginning from people who get their $L and then don't pay you back. Even with an established name and good business history in SL, you will give many loans out to people just get bored with SL & never log in again. Even worse, they do come back but with an alt and a brand new credit history which they then proceed to abuse again.

Next, you've got to compete with Lindex, which is right on the client, where everyone can click & buy $L. At this very moment I can get $185L for $1USD and I don't have to worry about a loan. You will have to do some serious advertisement to compete with that .

Personally, I don't think I'd use this service, and I don't know how many people would, but I don't like borrowing money and I'm no business genius so take my opinion with a grain of salt.

You seem interested in helping new players out, and I hope you find your niche. SL's a big place and I would imagine there will one day be a need for a service like you're proposing, but I don't know that we're ready for it yet. Good Luck!

Honestly, for something like this to work, you need to think big!

$L50 loans will be a big waste of time and resources.

You need to build your business model around blocks of $L1000 loans.

Figure out how to do that...

and youre in business big time

Thank you for the suggestions. I was unaware of the Linden Exchange...