Q: Are Propel Holdings' charges on loans and the analysis of those charges correct in the Propel Holdings question asked on Oct. 12?
Thank you.
Howard
Thank you.
Howard
5i Research Answer:
PRL has numerous subsidiaries in Canada and the US and operates many different divisions with different services. It offers payday loans, lines of credit, instalment loans and so on. Rates are going to differ widely by the product but also depending on the client. PRL prices for risk: if you are a higher risk client you are going to pay more. We can't confirm all the numbers, but rates are high. PRL serves an underserved market with little alternative. Charge offs are high as well, so pricing needs to be accurate. But note the industry in both countries is very highly regulated. While rates look egregious to what one might pay at a bank (with a secured loan) they are competitive with peers.