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And the 'Global Worst Financial Predator Award' Goes to...

05/01/2013 06:04 pm ET | Updated Jul 01, 2013
  • Ryan Mack Financial Expert and Economic Commentator

I have been known to speak out frequently against financial predators and the prominent figures who endorse them. Russell Simmons, BET, Magic Johnson, the Kardashians, and Suze Orman are just a few who have been on the receiving end of my criticism for their product endorsements. All of these products are legally sound, but lack any sense of moral responsibility to actually help those they pretend to be serving. All involved in these despicable practices have chosen to select profit over principal and for this I will continue to speak out. I will speak out to expose their wrongful practices as well as educate the community about the best alternatives found mostly within the principles of fiscal responsibility.

Imagine my surprise on a mission trip to educate the community in St. Lucia when I found similar practices. In my discussions with the community I ran across the firm FastCash which provides short term loans with interest rates as high as the Payday Loan industry found in the states. When you include the fees, you could be paying fees as high as 200 percent interest to pay back those loans (according to local sources who have acquired these loans. (This predator decided this important information was not important enough to display on their website -- of course not). The requirements to be eligible for the loans at are just as low. However, of all the financial predators I have seen, whether in the U.S. or elsewhere in the world, one was worse than all others in terms of foolishness, irresponsibility and turpitude.

Axcel Finance is a microfinance institution that just started operations in St. Lucia a little over a year ago. They specialize in providing short term loans (which are usually code for high interest rate loans) mainly for health care, education and home furnishings. So if you get sick unexpectedly, need money for school or want to purchase furniture for your home, they aspire to be the provider of services to you. Axcel Finance claims to have a new idea for community empowerment, an idea that was inspired and endorsed by a carnival band named "Toxik Nation." Upon my examination I discovered that I cannot think of a more toxic product for the people of St. Lucia.

What is this idea? Is it a new loan product to help the people of St. Lucia purchase homes, start businesses, or make it easier to further their education? No. Axcel Finance has decided to unveil a new loan product offering to "help" the people who cannot afford to "jump in Carnival." Yes -- if you are among those who cannot afford to jump in carnival for the St. Lucia Carnival (a purchase that can cost more than $1000 EC or about $400 US), you can now go to Axcel Finance and apply for a loan that will take you deeper into debt. Why would you or anyone do this, you ask? The answer is simple -- so you can participate in the Carnival parties with everyone else. Clearly, if you are currently in debt and not able to afford to purchase a costume, wear a wristband signifying you are a part of the potentially winning band, follow that band during the parade, and go to multiple parties being thrown by that band; it makes very little sense to go deeper into debt to spend the month of July partying!

Read how Roger Inglis, CFO of Axcel Finance, describes this loan process, "They then bring us the registration form along with valid IDs, a recent utility bill and job letter for the loan to be processed. Once that is approved, the payment for the costume will be made directly to the bands relieving them of the hassle of having to collect monies for costumes." The people don't even get to hold the money they are borrowing -- they just take out an expensive, high interest loan and directly pay the money to the band.

The people of St. Lucia are already speaking out against this practice. I have been in St. Lucia for over a week, doing multiple workshops for various groups of people (most of them disadvantaged) every day, and have yet to find anyone who agrees with this program. Many I have talked to have expressed their inability to get a loan for needs of true empowerment from Axcel Finance (i.e. education), but now they will most certainly be able to get a loan to purchase that costume in Carnival.

I would like to send a short message to Axel Finance, Toxik Nation, and the people of St. Lucia:

My message to Axel Finance: Are you so hungry to make money that you will prey upon people who are so down on their luck and are desperately in need of an escape from their impoverished situation? Can you not find another means of servicing the people of St. Lucia and the surrounding islands -- a service which will actually improve their lives? This product is nothing more than a candy bar given to a child which solves the short term problem of his hunger, gives him a sugar high, but leaves him crashing down more tired than before. The people of St. Lucia don't need a fancy costume which they will only wear once before they discard it for the next year. They don't need a month of partying and drinking to remind them they are not in a dire financial situation of poverty. They need homes, businesses, education -- and they need financial institutions that recognize that simply because you are making money in a legal way does not mean that you are being ethical. Shame on you for bringing this product to market; shame on you for partnering with a band called "Toxik Nation" who obviously has a vested interest in this deal because they will be on the receiving end of the monies; and shame on you for creating a more permanent underclass of society by keeping poor people under the unnecessary pressure of unnecessary debt.

My message to Toxik Nation: Shame on you for proposing this idea. I understand it is great money making opportunity for your band, but can't you seek other ways of making money than taking your people deeper into debt?

My message to the people of St. Lucia I understand the historical significance of Carnival. I understand what it means to the people to be a part of this long standing tradition which has been a staple of this society. Being in the states we have our own traditions that mean a lot to the African-American community, and I am not asking you to give up participating in this event. What I am asking you to do is to be responsible in how you participate in Carnival, educate yourselves of the best way to have fun, but not risk the financial security of yourself and family to do it. The longer we remain uneducated about the proper means of managing our resources, regardless of how limited those resources are, the more we leave room for these predators to move into your communities and profit from what you don't know. We cannot, and must not, continue to play the victims' role. If you are amongst those who cannot afford to pay for the experience of jumping in Carnival, that simply means that this is the year you find another means of entertainment that is within your budget. DO NOT pay for anything unnecessary today, with money you don't have, praying you will make the money tomorrow. Carnival is fun, Carnival means a lot to St. Lucia, Carnival is a tradition in many homes of St. Lucia...but one year without that new costume or VIP Carnival experience that you cannot afford is one year you move closer to making better financial decisions, one year closer towards a path of financial independence for you and your household, and one year closer that companies like Axcel Finance will stop doing business in your community...you will have used fiscal responsibility to put them out of business! I urge you to think about what will happen on August 1st when the hangover is gone, the music has stopped playing, and the coveted wristband showing allegiance to your band comes off. Will you be among those who now have to deal with an additional hangover of debt, or did you have a responsible fun time that is within your economic means and can now more effectively focus on your financial future? Instead of $1200 EC loan for VIP access for Carnival can you save $100 EC per month and put it towards an investment of long term value like land, education, savings, stocks, or a new business?

If you are among those who, like the hundreds of informed St. Lucians I met, are aware these practices are wrongful then your voice must be heard! You must make it your responsibility to inform the community about what Axcel Finance is doing. However, you must also protest with your actions by educating those who are underserved in your communities about the proper means of managing their resources. It is not enough to get angry at Axcel Finance, we must also be angry with ourselves for allowing our actions to open the door for these predators to exist in our communities in the first place.