Author: R. G. BerhoudPublisher:
ISBN:
Category : Finance
Languages : en
Pages :
Book Description
The Uses of Credit and the Problems of Debt Among Low Income Families
Author: R. G. BerhoudCredit Markets for the Poor
Author: Patrick BoltonPublisher: Russell Sage Foundation
ISBN: 1610440757
Category : Social Science
Languages : en
Pages : 315
Book Description
Access to credit is an important means of providing people with the opportunity to make a better life for themselves. Loans are essential for most people who want to purchase a home, start a business, pay for college, or weather a spell of unemployment. Yet many people in poor and minority communities—regardless of their creditworthiness—find credit hard to come by, making the climb out of poverty extremely difficult. How dire are the lending markets in these communities and what can be done to improve access to credit for disadvantaged groups? In Credit Markets for the Poor, editors Patrick Bolton and Howard Rosenthal and an expert team of economists, political scientists, and legal and business scholars tackle these questions with shrewd analysis and a wealth of empirical data. Credit Markets for the Poor opens by examining what credit options are available to poor households. Economist John Caskey profiles how weak credit options force many working families into a disastrous cycle of short-term, high interest loans in order to sustain themselves between paychecks. Löic Sadoulet explores the reasons that community lending organizations, which have been so successful in developing countries, have failed in more advanced economies. He argues the obstacles that have inhibited community lending groups in industrialized countries—such as a lack of institutional credibility and the high cost of establishing lending networks—can be overcome if banks facilitate the community lending process and establish a system of repayment insurance. Credit Markets for the Poor also examines how legal institutions affect the ability of the poor to borrow. Daniela Fabbri and Mario Padula argue that well-meaning provisions making it more difficult for lenders to collect on defaulted loans are actually doing a disservice to the poor in credit markets. They find that in areas with lax legal enforcement of debt agreements, credit markets for the poor are underdeveloped because lenders are unwilling to take risks on issuing credit or will do so only at exorbitant interest rates. Timothy Bates looks at programs that facilitate small-business development and finds that they have done little to reduce poverty. He argues that subsidized business creation programs may lure inexperienced households into entrepreneurship in areas where little profitable investment is possible, hence setting them up for failure. With clarity and insightful analysis, Credit Markets for the Poor demonstrates how weak credit markets are impeding the social and economic mobility of the needy. By detailing the many disadvantages that impoverished people face when seeking to borrow, this important new volume highlights a significant national problem and offers solutions for the future.
Building Assets, Building Credit
Author: Nicolas P. RetsinasPublisher: Brookings Institution Press
ISBN: 0815797842
Category : Business & Economics
Languages : en
Pages : 413
Book Description
A Brookings Institution Press and Harvard University Joint Center for Housing Studies publication Poor people spend their money living day to day. How can they accumulate wealth? In the United States, homeownership is often the answer. Homes not only provide shelter but also are assets, and thus a means to create equity. Mortgage credit becomes a crucial factor. More Americans than ever now have some access to credit. However. thanks in large part to the growth of global capital markets and greater use of "credit scores," not all homeowners have benefited equally from the opened spigots. Different terms and conditions mean that some applicants are overpaying for mortgage credit, while some are getting in over their heads. And the door is left wide open for predatory lenders. In this important new volume, accomplished analysts examine the situation, illustrate its ramifications, and recommend steps to improve it. Today, low-income Americans have more access to credit than ever before. The challenge is to increase the chances that homeownership becomes the new pathway to asset-building that everyone hopes it will be.
Credit and Debt
Author: Deep in Debt
Author: Evidence and Innovation in Housing Law and Policy
Author: Lee Anne FennellPublisher: Cambridge University Press
ISBN: 1107164923
Category : Business & Economics
Languages : en
Pages : 357
Book Description
This interdisciplinary volume illuminates housing's impact on both wealth and community, and examines legal and policy responses to current challenges. Also available as Open Access.
Assets, Credit Use and Debt of Low-income Households
Author: Marieka KlawitterPublisher:
ISBN:
Category : Cost and standard of living
Languages : en
Pages : 12
Book Description
Insufficient Funds
Author: Rebecca M. BlankPublisher: Russell Sage Foundation
ISBN: 1610445880
Category : Business & Economics
Languages : en
Pages : 337
Book Description
One in four American adults doesn’t have a bank account. Low-income families lack access to many of the basic financial services middle-class families take for granted and are particularly susceptible to financial emergencies, unemployment, loss of a home, and uninsured medical problems. Insufficient Funds explores how institutional constraints and individual decisions combine to produce this striking disparity and recommends policies to help alleviate the problem. Mainstream financial services are both less available and more expensive for low-income households. High fees, minimum-balance policies, and the relative scarcity of banks in poor neighborhoods are key factors. Michael Barr reports the results of an in-depth study of financial behavior in 1,000 low- and moderate-income families in metropolitan Detroit. He finds that most poor households have bank accounts, but combine use of mainstream services with alternative options such as money orders, pawnshops, and payday lenders. Barr suggests that a tax credit for banks serving primarily disadvantaged customers could facilitate greater equality in the private financial sector. Drawing on evidence from behavioral economics, Sendhil Mullainathan and Eldar Shafir show that low-income individuals exhibit many of the same patterns and weaknesses in financial decision making as middle-class individuals and could benefit from many of the same financial aids. They argue that savings programs that automatically enroll participants and require them to actively opt out in order to leave the program could drastically increase savings ability. Ronald Mann demonstrates that significant changes in the credit market over the past fifteen years have allowed companies to expand credit to a larger share of low-income families. Mann calls for regulations on credit card companies that would require greater disclosure of actual interest rates and fees. Raphael Bostic and Kwan Lee find that while home ownership has risen dramatically over the past twenty years, elevated risks for low-income families—such as foreclosure—may well outweigh the benefits of owning a home. The authors ultimately argue that if we want to demand financial responsibility from low-income households, we have an obligation to assure that these families have access to the banking, credit, and savings institutions that are readily available to higher-income families. Insufficient Funds highlights where and how access is blocked and shows how government policy and individual decisions could combine to eliminate many of these barriers in the future.
Indebtedness in Early Adulthood
Author: Jeanette Carlsson HauffPublisher: Springer
ISBN: 3030139964
Category : Business & Economics
Languages : en
Pages : 187
Book Description
This book reviews problems with credit use and causes of indebtedness among young adults, while uncovering possibilities to encourage a healthier attitude towards loans in this segment of the population. Both consumption loans and mortgages are covered in order to adequately represent real-world credit use by young people about to enter adulthood. It focuses on three distinctive actors: the legislative authorities, the financial institution, most commonly a bank, and finally the individual borrower. More specifically, the book discusses the functioning of these three entities in the context of young adults borrowing behaviour, and would appeal to academics, researchers and students of financial institutions and banking.
Debt for Sale
Author: Brett WilliamsPublisher: University of Pennsylvania Press
ISBN: 0812200780
Category : Social Science
Languages : en
Pages : 161
Book Description
Credit and debt appear to be natural, permanent facets of Americans' lives, but a debt-based economy and debt-financed lifestyles are actually recent inventions. In 1951 Diners Club issued a plastic card that enabled patrons to pay for their meals at select New York City restaurants at the end of each month. Soon other "charge cards" (as they were then known) offered the convenience for travelers throughout the United States to pay for hotels, food, and entertainment on credit. In the 1970s the advent of computers and the deregulation of banking created an explosion in credit card use—and consumer debt. With gigantic national banks and computer systems that allowed variable interest rates, consumer screening, mass mailings, and methods to discipline slow payers with penalties and fees, middle-class Americans experienced a sea change in their lives. Given the enormous profits from issuing credit, banks and chain stores used aggressive marketing to reach Americans experiencing such crises as divorce or unemployment, to help them make ends meet or to persuade them that they could live beyond their means. After banks exhausted the profits from this group of people, they moved into the market for college credit cards and student loans and then into predatory lending (through check-cashing stores and pawnshops) to the poor. In 2003, Americans owed nearly $8 trillion in consumer debt, amounting to 130 percent of their average disposable income. The role of credit and debt in people's lives is one of the most important social and economic issues of our age. Brett Williams provides a sobering and frank investigation of the credit industry and how it came to dominate the lives of most Americans by propelling the social changes that are enacted when an economy is based on debt. Williams argues that credit and debt act to obscure, reproduce, and exacerbate other inequalities. It is in the best interest of the banks, corporations, and their shareholders to keep consumer debt at high levels. By targeting low-income and young people who would not be eligible for credit in other businesses, these companies are able quickly to gain a stranglehold on the finances of millions. Throughout, Williams provides firsthand accounts of how Americans from all socioeconomic levels use credit. These vignettes complement the history and technical issues of the credit industry, including strategies people use to manage debt, how credit functions in their lives, how they understand their own indebtedness, and the sometimes tragic impact of massive debt on people's lives.