Peer-2-Peer lenders’ dishonest tactics

Peer-to-peer lending has emerged as one of the big Fintech trends in the recent years. It aims to get banks out of the lending and borrowing equation. It is, however, not without it’s problems.

The big issue with peer to peer lending is that it relies on consumers to provide the credit. Which is fine when the economy is in recovery, or something akin to it, but what happens when the economy takes a downturn?

Companies like Lendify and FundedByMe offer the lenders a rate the banks would not offer during a hyperinflation. That’s is good and it gives companies and individuals the possibility to borrow cheaper than at banks who may not lends them anything at all.  The problem with these companies is that their advertisement make it sound like lending is risk free, which of course, it isn’t.

One clear example is the recent Lendify advertising I saw on Twitter their services,  tagged with the Swedish hashtag #sparpodden. This was their tweet:

It translates into: today’s questions: Pay to have money at the bank or get good return at @LendifySE with #p2ploans?

When I questioned the tweet, as it compares alternatives with vastly different risk,  they just laughed it off.

The fact that an apparently serious financial provider would dismiss the risks of lending is sad and does not bode well for the alternative finance companies.  There is a, not insubstantial, probability that the company or individual that borrows money from these P2P lenders will default. Especially considering the relative high interest rates charged. If a loan has an interest rate over 10 percent you can be sure that it has that rate for a good reason.

I welcome any reforms or companies that make it easier for SME to borrow but it should not do so while being coy about the risks involved in these types of loans. Consumers are notoriously bad at accounting for risk and these types of schemes market themselves as safe while being exceedingly risky in some cases.

If you want to invest in lending products, invest in baskets of many loans rather than those that are loans to specific individuals and companies as these are riskier propositions.


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Chrono log #3 – Value creation & Unpaid Internships

It is finally time for the third installment of my vloggythingy. It has been awhile but I am back! Talking about value creation and unpaid internships, tying into the blog post about schibsted’s unpaid internships. Fun stuff! Check out the video below!

Value creation / generation is the fundamental pillar of business. This is also why unpaid internships are so awful, if a company cannot create value from your employment then they should not employ that position in the first place. I am of the opinion that unpaid internships is a scourge that should be purged from the corporate environment.

More importantly on value creation: Basically, anything you do to increase revenue and profits for the company. It may be direct or indirect but it should (and mostly does) affect your wage. If you have a proven track record with increased conversion rates for example, then use that to leverage your future wage or rate.

A consultant rate might be very high per hour (compared to a normal worker) but it is high for a reason: extra costs (overhead, taxes, social costs etc) and expertise. For the most part you pay a freelancer or a consultant a high rate because they are the experts and it is not financially viable for you to hire a full-time employee with that skill level for such a task.

Does your clients think your hourly rate is high? Charge per day or week. The client no longer pays for the means (hours) to the end but rather the end and the means are of little significance

The Sad State of The Unpaid “Internship” at Schibsted / Servicefinder

There are few things I despise more than unpaid internships. I am a firm believer that it is unprofessional to work for free. If a company cannot generate enough value from your employment to pay at least a livable wage, then should they even bother to hire you in the first place.  It is despicable abuse of  desperate labour

Today’s culprit is Norwegian media conglomerate Schibsted, owner of Aftonbladet,,, among others. With an annual revenue of over 14b NOK, one would think they could pay livable wages for their staff. I know (print) media is currently suffering from decreasing revenue and that there are many out of work journalist/journalist students but that doesn’t mean you can go around abusing them.

Below is the Google translate of a Swedish job advert for a job at ServiceFinder (too lazy to manually translate it of course), original can be found here and backup of it here. The translation is slightly dodgy but you will get the gist of the advert.

Service Finder has grown steadily since 2006 and now has clearer growth plans. Today we are the largest in the industry in Sweden, is one of Nordic’s largest groups Schibsted and cooperates with sites like and Aftonbladet. Service Finder has a strong corporate culture and growth focused. We believe that the company grows, so grows the individual. Now looking for a marketing intern for the service as a writer who wants to join in the growth of the department and the company

Full-time, 8:30 to 17:30
Unpaid internship, eight weeks starting in agreement (chance of employment available)

Your primary task is to create interesting articles in which you will be working as an investigative writer in industries such as construction, cleaning and moving. Examples of items are “How to find the right craftsman” and “What services people buy the paycheck.” Some of the items will be included in the article series, eg “Renovation School”, then you will get to have overall responsibility for the entire series of articles. You will also be responsible for creating different templates for contracts and guides / checklists along with marketing communications.

We offer you
The marketing department is a close-knit team and you will be working closely with marketing, marketing communications, and software developer. The team is very agile with quick decisions. It gives you great opportunities to influence and to implement fun new projects. It can also occur orders from other departments that you may be responsible for.

As a writer, you need:
• Be able to find innovative solutions to problems and be creative
• Have a talent for writing the word
• Able to adjust tonality based on audience and channel
• Be good at cooperating. You will be working closely with the project manager and designer.
• Be stress. We often work against tight deadlines and fight against time
• Takes responsibility, careful and structured.

We like you a little extra if you:
• Have relevant training as a writer or in journalism
• Are interested in web
• Can write search engine optimized

Interviews and selection is ongoing, so please send your application with relevant work samples as soon as possible but no later than 1 July 2013.

As you can see, the internship is unpaid, and is pretty much legitimate work. I am not sure how much anyone (especially someone with a journalist degree) will learn from writing about “How to find the right craftsman”. Internships as part of the education, which rewards university credits and allow you to get student grants/loans are fine in my opinion, but anything more than that is a joke. This “job advert” is a crass attempt by a very large organization to abuse (free) labour. The requirements are enough for be proper job, let alone an unpaid internship. It may be boring articles to write but the topics mentioned sure as hell is a legitimate job, one that should be paid. If you cannot generate enough money to support one journalist from such articles on properties like ServiceFinder, then you are doing something wrong.

I am not a great fan of unions but this is a case where they are important. I am not sure of the laws surrounding internships in Sweden but this is a sad case. I am sure a lot of people will apply in hopes of having a chance on permanent employment.  Unpaid internships are an evil that should be cleansed from the job market. They benefit no one in the long run. If a position does not generate enough value for a company to pay a minimum wage, then it should probably not exist.  The sooner unpaid internships are scrapped, the better.

Shame on Schibsted and shame on ServiceFinder. At least pay your employees a damn salary instead of pretending that it is an internship.


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