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DO CONSUMERS NEED MORE PROTECTION FROM SMALL‐DOLLAR LENDERS? HISTORICAL EVIDENCE AND A ROADMAP FOR FUTURE RESEARCH
Author(s) -
Bolen J. Brandon,
Elliehausen Gregory,
Miller Thomas W.
Publication year - 2020
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12894
Subject(s) - liberian dollar , economics , cash , business , monetary economics , finance
We summarize the current debate surrounding four small‐dollar credit products: pawn loans, vehicle title loans, payday loans, and cash installment loans from finance companies. We review the contributions of scholars that inform this debate. We underscore that users of these products fit the description of those whom consumer credit models predict benefit from these products. Many studies find that, on average, consumer use of small‐dollar credit products is, at worst, innocuous. There are, however, findings of heterogeneity in borrowers' experiences. The disagreements surrounding these credit products and the difficulty in crafting the proper policy response stems from this heterogeneity. ( JEL D18, G23)