http://www.economist.com/news/finance-and-economics/21571882-life-edges-americas-financial-mainstream-margin-calls
Low-income Households vs. Pay-day Lenders
This article focused on how payday lenders and cheque-casher services are taking advantage of low-income households in America and charging interest rates upwards of 400% annually. These companies rely on the poorer portion of the population to take out loans to cover basic daily needs and are then forced into taking out more loans to cover up the original debt. This trap not only keeps the low-income borrowers in debt but is unnecessary since these sorts of services scare lower income households away from placing what little money they have in banks and forfeit the ability to make interest off of a savings account. If large banks started opening basic and simple savings accounts targeted at lower-income individuals this could greatly reduce the risk of low-income families carrying big amounts of cash while still reaping the benefits of acquiring a moderate revenue from a portion of the population that has three times the overall rate of households without savings accounts.
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