Visagie still around?

A comment came in today on an old article about the dodgy lending scheme Rudie Visagie was proposing.

The reader “trymore” provides some details of a new deal apparently being run by Rudie Visagie. As I stated last time this gentleman’s name came up, I have no personal interest or involvement here at all. My interest was just to show how the deal made no business sense to Visagie given the significant interest rate, currency and credit risks involved. Thus, it sounded like a scam. At the time, I quite enjoyed hearing all the supporters claiming I just didn’t want him to succeed. Meanwhile, several regulators started to probe the dubious claims, and it became clear that apart from anything else, Visagie wasn’t licenced to carry out the business he was proposing.

They quickly quietened down when the whole thing fell apart and Visagie’s clients lost money. Several readers of this site gave their own stories to this extent.

“Trymore” had the following to say:

Our company was also approached to do bussiness with Mr Visagie’s new company , which is now called Better Life. Our clients would get Loans from them and on final approval would have to pay R5700.00, on enquiring about their company eg contact no’s , name of directors, physical address ect we were continuously stonewalled and eventualy given the name of their “attornies?(who had no knowledge of them) and their buss address in Blouberg Str(they are merely renting desk space).So my advise to anyone wanting to do buss with Better Life is, DONT GO THERE!!!!!!

This is a little out of my area of knowledge, but it sounds like the wheels are turning yet again. One doesn’t need sophisticated risk models allowing for the interaction of multiple risks, individual behaviour and an estimate of one’s risk appetite to know that a business that isn’t proud to show itself off isn’t one you should trust.

This reminds me of the example of the business premises of banks versus supermarkets. Banks typically spend large amounts of money on fancy head-offices, marble floors, giant pillars and so on. Supermarkets don’t. The key differentiator is that at a supermarket, you don’t care if they are in business tomorrow or not. You can tell the quality of the products by inspecting it and if they aren’t around tomorrow you aren’t affected. A bank, on the other hand, needs to show that it is not a fly-by-night operator. It needs to show that it has the resources to withstand economic crises, interest rate shifts and tilts and butterflies, poor credit events and the operational risks associated with any business. A bank needs to convince customers that it is solvent and good for the long term.

I don’t deal with financial institutions that look like supermarkets. No matter how low the prices are.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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