Small-dollar Credit Use In Underserved Populations: Evidence From Tacoma, Washington
Global Conference On Business & Finance Proceedings
Business and Leadership
We present results from a survey of credit use among people potentially underserved by mainstream banking. We characterize small-dollar credit use among low-income residents of Tacoma, Washington, and among students at various types of colleges in that city. These sorts of populations are potential victims of predatory lending. We wish to consider the suitability of peer-to-peer (P2P) loans as a credit resource for these groups. Our results show that P2P lending has the potential to provide a new source of credit for some underserved borrowers. Students' familiarity with technology and social networking make them especially likely beneficiaries, once they learn that P2P lending exists. For working people who might otherwise use payday loans, P2P can be a viable option if a way can be found to speed up the loans' funding process.
Livingston, Lynda S., and Hiroki Tokuyama. 2013. "Small-Dollar Credit use in Underserved Populations: Evidence from Tacoma, Washington." Global Conference On Business & Finance Proceedings 8(2): 208-212.