Marieke Bos, Susan Payne Carter, and Paige Marta Skiba
- Published in print:
- 2021
- Published Online:
- January 2022
- ISBN:
- 9781501759383
- eISBN:
- 9781501759284
- Item type:
- chapter
- Publisher:
- Cornell University Press
- DOI:
- 10.7591/cornell/9781501759383.003.0006
- Subject:
- Law, Public International Law
This chapter focuses on pawnshops and the institutions of pawnbroking. Studies show that large numbers of poor people and especially those who are unbanked use pawn loans by leaving collateral. This ...
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This chapter focuses on pawnshops and the institutions of pawnbroking. Studies show that large numbers of poor people and especially those who are unbanked use pawn loans by leaving collateral. This institution has existed for centuries and while attention has shifted away from it, the informal pawn broker remains a source of survival for the very poor. And this is not unconnected to what happens in the larger, formal economy. After the global financial crisis that began in the United States in 2007–2008, quickly engulfed the world, and became the protracted Great Recession, the pawnbroking industry in the United States and Sweden grew by an astonishing 20 percent per year, as poor people were forced to turn to informal credit for their survival. Despite this industry's importance, pawnbroking has characteristically received little attention and also little regulation. The chapter then raises a host of questions regarding the welfare consequences of these informal lending markets in rich countries and how they could be regulated.Less
This chapter focuses on pawnshops and the institutions of pawnbroking. Studies show that large numbers of poor people and especially those who are unbanked use pawn loans by leaving collateral. This institution has existed for centuries and while attention has shifted away from it, the informal pawn broker remains a source of survival for the very poor. And this is not unconnected to what happens in the larger, formal economy. After the global financial crisis that began in the United States in 2007–2008, quickly engulfed the world, and became the protracted Great Recession, the pawnbroking industry in the United States and Sweden grew by an astonishing 20 percent per year, as poor people were forced to turn to informal credit for their survival. Despite this industry's importance, pawnbroking has characteristically received little attention and also little regulation. The chapter then raises a host of questions regarding the welfare consequences of these informal lending markets in rich countries and how they could be regulated.
Thomas A. Durkin, Gregory Elliehausen, Michael E. Staten, and Todd J. Zywicki
- Published in print:
- 2014
- Published Online:
- August 2014
- ISBN:
- 9780195169928
- eISBN:
- 9780199384976
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195169928.003.0008
- Subject:
- Economics and Finance, Microeconomics
This chapter examines the general issue of credit availability for everyone. It focuses especially on the economics of those kinds of consumer credit sometimes singled out as subprime credit, fringe ...
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This chapter examines the general issue of credit availability for everyone. It focuses especially on the economics of those kinds of consumer credit sometimes singled out as subprime credit, fringe credit, or high-cost credit. These sorts of credit include payday, pawn, and other credit in small amounts or for short times, most often used by credit-constrained consumers seeking additional credit sources. The contention here is that because such products are likely to remain controversial, economic study of their uses and problems can prove beneficial. Economics is hardly determinative in modern society, but it often can shed some light on phenomena that otherwise may appear anomalous. The chapter also looks at credit for younger consumers such as college students and looks at some of the controversy over subprime mortgage credit not otherwise considered extensively in this book.Less
This chapter examines the general issue of credit availability for everyone. It focuses especially on the economics of those kinds of consumer credit sometimes singled out as subprime credit, fringe credit, or high-cost credit. These sorts of credit include payday, pawn, and other credit in small amounts or for short times, most often used by credit-constrained consumers seeking additional credit sources. The contention here is that because such products are likely to remain controversial, economic study of their uses and problems can prove beneficial. Economics is hardly determinative in modern society, but it often can shed some light on phenomena that otherwise may appear anomalous. The chapter also looks at credit for younger consumers such as college students and looks at some of the controversy over subprime mortgage credit not otherwise considered extensively in this book.
