Case spotlight: Cash Assist or Shark Loan? In Quest of Doing Well While Doing Good

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This case was featured in the August 2022 issue of Connect.

Who – the protagonist

Jim Kamal, a recently graduated accounting student and a budding entrepreneur.

What?

Aged 24, Jim had always been a social entrepreneur with a big heart and innate business sense. 

Jim also had a solid education in accounting, and thought he could find an entry-level job with a local business quite easily in his native Canadian province of Alberta.

But the challenge of starting and growing his own payday loan business appealed more. 

The sector involves people applying for a short-term, unsecured small loan with high-interest rates and a pre-determined date of maturity. Such loans are offered by lenders other than depository institutions like banks with the intention to help borrowers cover cash shortfalls until their next payday.

Jim’s vision was to set up a payday loan business that would allow him to “do good while doing well”, something that’s notoriously difficult to achieve in a sector that attracts unethical practices.

Money notes

Why?

Jim had always been passionate about serving the community and helping the needy.

His parents emigrated to Canada before he was born. His father worked as a full-time taxi driver and his mother was a seasonal personal tax consultant. While not rich by any means, both parents were committed to lending Jim enough seed money to jump-start a small business of his choice.

Jim realised his passion for crunching numbers and customer service throughout his undergraduate years, and he enjoyed being involved with student clubs that promoted ethical values and social responsibility in business.

The idea of opening a payday loan store in the area in which he grew up started to consume his attention.

However, the more he learned about the way the payday loan industry worked, the harder it became for him to decide on whether to proceed with such a business.

When?

It was a sunny morning on 6 April 2019 when Jim was sitting on the patio of a coffee shop, observing people entering and leaving a nearby payday loan store. A passion for entering the industry had been sparked.

Where?

Jim resided in the Albertan city of Edmonton, and this is where he wanted to set up his payday loan business.

Key quote

“An entrepreneur with a mission.”
Jim’s aunt predicted a great entrepreneurial career for him.

What next?

While looking into the demographics of the payday loan industry in general and the Edmonton market in particular, Jim could not help but think that his parents could have been his clients during his childhood as he could still remember how hard it was for them to make ends meet financially at the end of every month.

Would it be fair for Jim to take advantage of the underprivileged and vulnerable population that formed the main clientele of payday loans? His ultimate dilemma was whether he could “do well while doing good”?

AUTHOR PERSPECTIVE 

Dilemma facing former student

Ali said: “The idea of writing this case came about when a former student approached me to discuss the dilemma he was facing. A few minutes into the discussion, it was clear that the situation could make a great case. On the one hand, the problem to be solved was obvious, the decision wasn’t easy to make, and the payday loan industry itself was quite unique. On the other hand, the situation had the potential to trigger polarising opinions and spark interesting discussions in class.

“Furthermore, the case is suitable for the teaching of both the science (analytical skills) and art (judgment) of decision making. Learners are required to conduct an extensive technical analysis as well as use their judgement in order to recommend a way forward.”

profit going up

Overcoming challenges

Ali explained: “One of the advantages of this case is that it focuses on a unique industry sector that is characterised by both high profitability and a reputation for unethical practices. It was relatively difficult to collect sufficient market data that reflected the dynamics of the market and relevant to the decision-making process.”

To the point

Ali continued: “While the case is meant to be short and concise, it is also rich enough in facts to allow instructors to make a variety of disciplinary and pedagogical choices. It has been used to teach strategic management, entrepreneurship, business modelling, and business ethics; and to discuss the role of personal values and preferences in decision making. The case was also used in a comprehensive and multi-disciplinary case competition.”

Relatable protagonist

He commented: “It is striking how easy it is for students to put themselves in the decision-maker’s shoes. They can understand the dilemma and relate to the protagonist easily because he has just finished his undergraduate studies and is looking to start a career.

“Students also like the fact that the case is short yet comprehensive. The need to draw on their personal values and judgment makes it even more stimulating.”

The art of a great case

Ali concluded: “A great teaching case is one that tells a captivating story, but the ultimate objective is to allow the instructor to teach the science and/or the art of decision making. The case writer must think constantly about how the case is going to be perceived by students and used by instructors in class. 

“A great case is also concise yet comprehensive enough to give the learner sufficient information to understand the situation, draw meaningful conclusions, and/or make reasonable assumptions and hypotheses. The content of the case should be accessible enough to allow the learner to move quickly from the ‘what’ (facts) to the ‘so what’ (conclusions, assumptions, and hypotheses), and to the ‘how’ (recommendations).”

THE CASE 

The case

Who – the protagonist

Jim Kamal, a recently graduated accounting student and a budding entrepreneur.

What?

Aged 24, Jim had always been a social entrepreneur with a big heart and innate business sense. 

Jim also had a solid education in accounting, and thought he could find an entry-level job with a local business quite easily in his native Canadian province of Alberta.

But the challenge of starting and growing his own payday loan business appealed more. 

The sector involves people applying for a short-term, unsecured small loan with high-interest rates and a pre-determined date of maturity. Such loans are offered by lenders other than depository institutions like banks with the intention to help borrowers cover cash shortfalls until their next payday.

Jim’s vision was to set up a payday loan business that would allow him to “do good while doing well”, something that’s notoriously difficult to achieve in a sector that attracts unethical practices.

Money notes

Why?

Jim had always been passionate about serving the community and helping the needy.

His parents emigrated to Canada before he was born. His father worked as a full-time taxi driver and his mother was a seasonal personal tax consultant. While not rich by any means, both parents were committed to lending Jim enough seed money to jump-start a small business of his choice.

Jim realised his passion for crunching numbers and customer service throughout his undergraduate years, and he enjoyed being involved with student clubs that promoted ethical values and social responsibility in business.

The idea of opening a payday loan store in the area in which he grew up started to consume his attention.

However, the more he learned about the way the payday loan industry worked, the harder it became for him to decide on whether to proceed with such a business.

When?

It was a sunny morning on 6 April 2019 when Jim was sitting on the patio of a coffee shop, observing people entering and leaving a nearby payday loan store. A passion for entering the industry had been sparked.

Where?

Jim resided in the Albertan city of Edmonton, and this is where he wanted to set up his payday loan business.

Key quote

“An entrepreneur with a mission.”
Jim’s aunt predicted a great entrepreneurial career for him.

What next?

While looking into the demographics of the payday loan industry in general and the Edmonton market in particular, Jim could not help but think that his parents could have been his clients during his childhood as he could still remember how hard it was for them to make ends meet financially at the end of every month.

Would it be fair for Jim to take advantage of the underprivileged and vulnerable population that formed the main clientele of payday loans? His ultimate dilemma was whether he could “do well while doing good”?

AUTHOR PERSPECTIVE 

Author perspective

Dilemma facing former student

Ali said: “The idea of writing this case came about when a former student approached me to discuss the dilemma he was facing. A few minutes into the discussion, it was clear that the situation could make a great case. On the one hand, the problem to be solved was obvious, the decision wasn’t easy to make, and the payday loan industry itself was quite unique. On the other hand, the situation had the potential to trigger polarising opinions and spark interesting discussions in class.

“Furthermore, the case is suitable for the teaching of both the science (analytical skills) and art (judgment) of decision making. Learners are required to conduct an extensive technical analysis as well as use their judgement in order to recommend a way forward.”

profit going up

Overcoming challenges

Ali explained: “One of the advantages of this case is that it focuses on a unique industry sector that is characterised by both high profitability and a reputation for unethical practices. It was relatively difficult to collect sufficient market data that reflected the dynamics of the market and relevant to the decision-making process.”

To the point

Ali continued: “While the case is meant to be short and concise, it is also rich enough in facts to allow instructors to make a variety of disciplinary and pedagogical choices. It has been used to teach strategic management, entrepreneurship, business modelling, and business ethics; and to discuss the role of personal values and preferences in decision making. The case was also used in a comprehensive and multi-disciplinary case competition.”

Relatable protagonist

He commented: “It is striking how easy it is for students to put themselves in the decision-maker’s shoes. They can understand the dilemma and relate to the protagonist easily because he has just finished his undergraduate studies and is looking to start a career.

“Students also like the fact that the case is short yet comprehensive. The need to draw on their personal values and judgment makes it even more stimulating.”

The art of a great case

Ali concluded: “A great teaching case is one that tells a captivating story, but the ultimate objective is to allow the instructor to teach the science and/or the art of decision making. The case writer must think constantly about how the case is going to be perceived by students and used by instructors in class. 

“A great case is also concise yet comprehensive enough to give the learner sufficient information to understand the situation, draw meaningful conclusions, and/or make reasonable assumptions and hypotheses. The content of the case should be accessible enough to allow the learner to move quickly from the ‘what’ (facts) to the ‘so what’ (conclusions, assumptions, and hypotheses), and to the ‘how’ (recommendations).”

THE CASE 

The authors

Subhadip Ghosh
Assistant Professor
MacEwan University School of Business
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