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Pawnshops: Are They Really A Solution For The Vulnerable Population?

Author

Listed:
  • Arturo GARCÃ A-SANTILLÃ N,

    (UCC Business School Universidad Cristóbal Colón)

  • Jesica RAMOS-HERNÃ NDEZ,

    (UCC Business School Universidad Cristóbal Colón)

  • Sara HERNÃ NDEZ-GONZÃ LEZ,

    (UCC Business School Universidad Cristóbal Colón)

  • Patricia RIVERA-SANTIAGO

    (UCC Business School Universidad Cristóbal Colón)

Abstract

Credit plays a significant role in the country´s economy, as much as the financial system, but what happens when a large part of the population has difficulties to access credit? Because of the former, the main aim of this essay is to analyze the viability of access to a credit modality through a pawnshop versus the alternative of a bank loan. For that, calculations of overdue amortizations were made. The results allow us to say that despite being more easily accessible for vulnerable population, the option of a pawn broking credit incurs in higher costs compared to a bank loan.

Suggested Citation

  • Arturo GARCÃ A-SANTILLÃ N, & Jesica RAMOS-HERNÃ NDEZ, & Sara HERNÃ NDEZ-GONZÃ LEZ, & Patricia RIVERA-SANTIAGO, 2017. "Pawnshops: Are They Really A Solution For The Vulnerable Population?," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 6(1), pages 1-52, January.
    • Handle: RePEc:scm:ecofrm:v:6:y:2017:i:1:p:52
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    References listed on IDEAS

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    3. Stephen D. Williamson, 1987. "Costly Monitoring, Loan Contracts, and Equilibrium Credit Rationing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(1), pages 135-145.
    4. Ruiz, Claudia, 2013. "From pawn shops to banks : the impact of formal credit on informal households," Policy Research Working Paper Series 6634, The World Bank.
    5. Adel Varghese, 2005. "Bank-moneylender linkage as an alternative to bank competition in rural credit markets," Oxford Economic Papers, Oxford University Press, vol. 57(2), pages 315-335, April.
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