As one looks for best ways to make a difference in other’s lives, a discussion of Other People’s Money or OPM is inevitable. OPM happens when friends or relatives ask for a gift of cash, or loan to start a business. This kind of request would not normally be successful at a bank because the banks need at least two things, may be more, to lend: a business registration with ACA, and a cash-flow history. The bank needs this information to establish that the requester is truly a business, and that the business will have cash to pay back when the time comes.
OPM lenders lend differently, on the basis of friendships and family relationships, and promises. It is heartwarming that a survey found over 80% of people were willing to lend money to relatives in need. When asked if they would still make the same loan if they knew upfront the loan would not be paid back as promised, the percentage of respondents came down to 32%.
bmpUnited will not make OPM loans, especially if they will not be paid back. This decision is consistent with 68% of the surveyed population. OPM loans are risky because the borrower very likely has insufficient experience handling the size of money borrowed, or running businesses for which the money was borrowed. Worse still , bmpUnited is unable to follow the money (FTM), and therefore cannot confirm the money is used as promised. (See Webpage on FTM). Above all OPM loans are an obstacle to bmpUnited mission to serve the most people with limited resources.