I learnt this the painful way on this one. here is the problem....

I learnt this the painful way on this one.

here is the problem.  The below snapshot was taken from their investor presentation on 31 August 2022



the illustrative example is what needs to be focused on.  The theory goes, for secured lending, losses run at ~21% of net interest margin.  For unsecured lending, losses run at 31% of NIM.  Sounds ok in theory.

How are they actually doing?  According to latest quarterly, "losses continue to trend lower in 1Q24 to <4.9%."

so this is running at ~44.5% of NIM, well above anything given in the illustrative table.  The loss rates are un-sustainible, more capital required, until no-one is prepared to put up more capital...

yes MME can make very fast credit assessments, but it does not seem to make enough right ones...

I am open to criticism if its justified...