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Keyport Islands

Lending

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2 hours ago, Keyport Islands said:

How does one start a bank or lending institute 

Considering you only have ~130K, I wouldn't recommend it.

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Just now, Keyport Islands said:

I’m trying to find out the process

I'd just change your nation name to mention a bank and put up an ad that says, "HEY! YOU THERE! MONEY!"

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You need essentially 2 things to start a bank:

Borrowers - People that want to borrow money from you and are willing to pay you interest on the loan. You need to be able to trust that these people will pay, and/or you need a way to enforce payment.

Money - Either your own money or people willing to loan you money at an interest rate that is (at least slightly) lower than what you can extract from your borrowers.

 

Also helpful:

A gathering place for borrowers and lenders, such as a discord channel.

A storage location (nation or alliance bank) that is reasonably safe from raiding where you can temporarily stash large sums of cash.

A trustworthy staff to help you with raising capital, collecting interest, and paying interest.

 

To make your bank successful will require a trustworthy reputation and a lot of work. 

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On 4/13/2019 at 10:24 AM, Keyport Islands said:

I appreciate the feedback. Bank safety Is best accomplished how?

People behind you. So in an alliance bank would be good if you have, or are in, an alliance that will help you out with your system; especially if you give less interest to your alliance mates.

Otherwise, make sure you have a full military to protect yourself if you have it on yourself.

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I would recommend starting of with AT LEAST 500 million dollars, if not more. Otherwise, you'll be like how I was when I started my bank, nowhere. While at first it may seem to go okay, in the long term, it'll go terrible. After that, just advertise, and make sure you have good loan enforcement.

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If you can't raise 5bil in a week, quit. Banking just isn't worth it these days unless you can provide alliance loans. Over 50% of all clients are alliances, which need money for growth, warchests or rebuilds. Only a handful of players still lend money, because they can get interest free loans from their alliance.

Another tip is not giving loans under 500mil, which basically means, don't lend to low tier nations. If you start with a really tiny bank, you'll simply waste your time as the profit you'll make will be miniscule. Scale is everything.

Something else important to remember is not starting a bank unless you have at least some FA experience. If you find it weird to message random strangers on discord, you'll have a really hard time. 99% of your work is going to be people oriented. The whole image of an accountant sitting behind a desk is basically bullshit. If you can't network and develop strong connections, you'll flop within weeks.

The last and most important essential you need is a great staff of directors. And I'm not talking about people that will run your books or operate your server. You need people that are just as good as you or even better. People that can add something to your team and support you in the things you're lacking. 

For example, in Orion, Sphinx manages most of the books these days, handles share holders, pays out dividends and keeps track of share trading. Benfro is a secondary offshore and helps me collect cash when I'm tied up in a war or need to juggle funds. Gatorcock runs Orion's trade department and handles the official Orion offshore alliance. Seb is the chief whale that rubs his hands together and makes tens of billions appear.

Notice how Sphinx is the leader of TCW, Benfro the High Gov of TKR, Gator an absolutely talented accountant and Seb the largest nation in the game that also ran Emerald Bank.
If your team is comprised of Jeff, Billy and Terry that are sitting in a micro alliance, your bank will suck. You're only as good as your team.

With all above said, I don't suggest you start a bank. It's just not worth it. If you want to make money, invest in Horizon Bank or Orion Bank and let them cook your money.
The amount of time required to run a bank is just simply not worth it.
 

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On 4/21/2019 at 10:02 PM, Radoje said:

If you can't raise 5bil in a week, quit. Banking just isn't worth it these days unless you can provide alliance loans. Over 50% of all clients are alliances, which need money for growth, warchests or rebuilds. Only a handful of players still lend money, because they can get interest free loans from their alliance.

I disagree here. Of course alliances can be great debtors, but the implication that a bank can't survive without them is wrong. Nation loans can be quite lucrative if you do it right and efficiently.

You are right, lots of alliances offer interest free loans to members, but with proper sales work, there will be plenty of people looking to get loans. A majority of the player base isn't in an alliance with great lending power.

You may be joking in your first remark, but it is very possible to profit managing just a few hundred million in assets.

On 4/21/2019 at 10:02 PM, Radoje said:

Another tip is not giving loans under 500mil, which basically means, don't lend to low tier nations. If you start with a really tiny bank, you'll simply waste your time as the profit you'll make will be miniscule. Scale is everything.

Going off of my previous point, there is profit to be made. And more importantly, smaller nations will grow and, if you cultivate a relationship with them, they come back to you with larger requests, meaning more profit for you. I've got a feeling you're trying to scare off someone from joining an already crowded market with these large numbers that are likely your own standard. Once again, in my experience, there is plenty of money to be made lending to individual nations in amounts ranging from just $20m and up, sometimes less. Surely, the more you loan, the more you make, but scale is a gradual process, not a gateway of entry.

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