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It’s been more than 25 years since Bill Gates dismissed retail banks as “dinosaurs,” but the statement may be as true today as it was then. Other sectors of retail lending have not fared much better. Banking for small and medium-sized enterprises (SMEs) has been astonishingly unaffected by the rise of the Internet.
There are a couple of reasons for this: Asset managers can see cashflow and earnings fluctuate wildly with markets. For alternative asset managers such as hedge funds, their cashflows may be cut by more than half as profits fall and they collect a smaller fee from their profit participation agreements.
This pivot required the organization to change its business model from wholesale agricultural commodities to the production and retail of consumer goods. While the organization had strong core values and a revitalized product, its retail strategy and brand were underdeveloped.
Retail sales also grew more slowly than expected in April, and the furniture market stalled as fewer families moved into new homes. The unregulated shadow banking sector has played a strong role in the recent credit boom, with the share of credit growth financed by the sector rising from 11 percent in 2006 to 32 percent in 2013.
Even a star company like Nigeria’s online retailer Jumia ( known by some as the potential “African Amazon” ) is struggling to return profits to early investor Rocket Internet, of Germany. Why the downbeat mood? Toyota and Yamaha have found motorbike customers through such social group structures.
“It takes time to get a consistent cashflow going. Find an accountant who can help you set up your finances and make tax filing easier. I wanted to focus solely on retail and consumer goods — the industry where I had the greatest experience — and I couldn’t always do that,” she says.
The Brady-Ryan plan is based on a “destination-based cashflow tax” (DBCFT) that is also mistakenly labeled a “border-adjustment tax” and has five critical features: A reduced rate, down to 20%. That plan has dominated tax reform dialogue for the last six months, and unfortunately so.
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