The Cofidis team are one of my favourites. This wasn’t always so but the arrival of Eric Boyer has help to clean up a messy team. Boyer has brought Dutchman Vincent Villerius in as a full-time coach, something worth noting given many bigger teams don’t have a full time coach on their books.
Things aren’t perfect on the team, I’ve written about the curious reliance on fax machines and the bungled advertising stunt in the Tour de France. Above all they don’t really have a big budget, instead they have plenty of all rounders who might be very good but without a pure sprinter or a pure climber, wins are hard to come by.
But let’s put aside the team for a moment and take a look at the named company behind the squad. Cofidis is a consumer credit business.
Earlier this year there was speculation that the sponsor was going to withdraw. It had backed a team since 1997 and in recent times the business itself was bought by another bank for a hefty €1.9 billion. New owners Crédit Mutuel realised that they could take the Cofidis brand into the rest of Europe and cycling was an effective means to do this and eventually backed the team.
Rip-off money lenders?
As much as I like the team, the sponsor is a lot less inspiring. It’s a money lender that often comes in for criticism in France. It’s not alone, others operating in the sector also come in for a lot of scrutiny. But you can see why, here’s an example of a loan available from them compared to the same loan from the French postal service La Poste:
| Cofidis | La Poste | |
| Loan Amount | €2,000 | €2,000 |
| Repayments | 19 x €120 per month + final payment of €70 | 17 x €121.92 per month |
| Effective interest rate | 19.4% | 4.9% |
| Admin fees | nil | €10 |
| Total cost | €350.28 | €82.64 |
As you can see, someone borrowing money from Cofidis is going to be paying out a lot more, and also for longer, when compared to other options.
Maxxed out
Cofidis in particular are infamous for their use of what is called le crédit revolving. It’s a form of credit where the borrower is given a pot of money and pays interest on this. For example you can be given €1000 and you “merely” pay €40 a month as interest… but there’s no actual repayment. Therefore the lender gains a long term stream of repayments as it’s hoped the borrow doesn’t repay the money quickly. It’s similar to maxxing out a credit card and only meeting the minimum payments, something a credit card company loves since it as long as a payments are met, this is very profitable business. Only instead of a borrower gradually reaching their credit ceiling, they are given their max instantly. Plus the interest rate applied can be higher than a credit card.
Finally, Cofidis target market is those on low incomes. It’s not in the business of making home loans or corporate lending, indeed the max loan size is capped at €21,500. Large sections of its customers are unemployed. It’s pretty much a French version of a subprime lender like Household in the US.
Not-so-radiant
So one of my favourite teams and its sunshine logo is really backed by a business that sells expensive loans to more vulnerable sections of society.
On the plus side, such loans in France are relatively tightly regulated and like most Europeans, the French don’t embrace debt like their British or American cousins.
I guess I don't see why the "vulnerable sections of society" are so vulnerable. Is being lower on the economic scale(s) an excuse to be stupid?
I'm glad that anyone backs a cycling team, especially a team like Cofidis that isn't stacked with ego-maniacal douchebags.
Vulnerable because they don't have spare cash and so a sudden problem, say they crash their car, makes a dent in their cash flow. Or because they are not financially literate and like I show above, many people sign up for a loan that costs way more than a cheaper alternative.
Cofidis comes in for plenty of stick in the French media as a business that's clever at getting people into debt.