The World Financial Services Corporation (WFC) is a private company that provides credit to people who are struggling to pay their bills. In its fiscal 1996 financial year, the company generated revenues of $79.7 million, an increase of 20 percent over 1995. In the five years since the management buyout, the company has grown at a compound rate of 15 percent. In fiscal 1992, the company's average loan size was $2,500 with an average maturity of ten months. Despite this, the firm has maintained tight control of costs and loan quality. In 1995, the company reported a net income of $10 million, which is a healthy return for the firm.

During the mid-1990s, World experienced increased competition in the small loan consumer finance industry. Its competitors, mostly independent loan offices or chains of 20 or fewer locations, entered the subprime lending market. Due to the wide scope of this market, lenders were able to issue loans with weak underwriting standards and subsequently allowed borrowers to carry higher debt loads than they had been able to pay in full. Thus, World's business suffered.

The competitive landscape in the small loan consumer finance industry was radically changed by the mid-1990s. With the entry of credit card companies, World faced greater competition in the subprime lending market. Because about 30 percent of Americans do not qualify for credit cards, this market had a large amount of untapped potential. Many of these lenders issued loans with a low underwriting standard, enabling borrowers to carry higher debt. Because the market was more competitive, the number of World's customers became more competitive and more difficult to manage.

The World Financial Services (WFC) sought to improve operational efficiency and reduce costs by installing computerized office functions in its branch offices. These improvements improved efficiency and freed loan officers to focus on providing better customer service. By 1976, the WFC had lost more than US$10 million in bad overdrafts and uncollected funds. The company's computerized accounting functions reduced operational costs by a considerable extent. This allowed WFC to grow at a faster pace and expand its network of branches.

While World Financial Services has been around for over a century, the company's success was largely due to its innovative strategy. The company placed its loan offices in locations that were convenient to other lenders. Because small loan consumers typically use more than one lender, World Financial Services had a distinct competitive advantage. The volume of capital available at lower costs and the efficiency of operational costs through computerized accounting functions helped World finance corporation become the world's largest lender.

World Financial Services' main competitors are small loan companies. In addition to local office locations, World Financial Services also competed with large chains and independent lending offices. Their advantage in this industry was the volume of capital they could acquire at a lower cost. In the end, the company's success was based on its ability to expand its geographic presence by opening offices in other parts of the country. Its growth accelerated at the expense of its competitors.

World Finance had several advantages over its competitors. In the mid-1990s, the company entered the subprime lending market, which was a huge and fragmented market. Since thirty percent of the American population couldn't qualify for a credit card, it was a major advantage for World. This led to a massive decline in sales and profitability. While the company's competitive advantage was not directly related to its operations, it was the result of poor quality of the underwriting practices of other companies.

In 1975, World Financial Services established affiliate offices in many countries, and had about US$50 million in deposits. But in 1976, the Panamanian banking commissioner seized the Unibank, which was a debtor to the National Bank of Panama and had already lost $10 million. In the same year, the Comptroller of the Currency forced Cartaya to close Pan American Bank of Hiateah. This WFC was forced to close its branch offices because it had lost US$2 million in uncollected funds and bad overdrafts.

As competition in the small-loan consumer finance sector increased, World saw the opportunity to reduce its costs. In the mid-1990s, World's competition increased as credit card companies entered the subprime lending market. However, the market was fragmented and large, so World was unable to provide adequate service to borrowers who couldn't qualify for a credit card. As a result, the company's business model became more concentrated and was forced to cut off some branches.