Are Icelandic consumers of payday loans financially illiterate?
Considerable discussion has taken place in Iceland regarding firms offering small loans such as payday loans or microfinance loans. On one side people view these loans as adding to the choice of financial products available to consumers, while on the other side these loans are often viewed as loansh...
| Published in: | Tímarit um viðskipti og efnahagsmál |
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| Main Authors: | , , |
| Format: | Article in Journal/Newspaper |
| Language: | Icelandic |
| Published: |
Institute of Business Research
2018
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| Subjects: | |
| Online Access: | http://www.efnahagsmal.is/article/view/a.2018.15.2.4 https://doi.org/10.24122/tve.a.2018.15.2.4 |
| Summary: | Considerable discussion has taken place in Iceland regarding firms offering small loans such as payday loans or microfinance loans. On one side people view these loans as adding to the choice of financial products available to consumers, while on the other side these loans are often viewed as loansharking as the annual interest rate is high. However, very little of this discussion has taken place in the Icelandic academic community and as a result no research has been conducted on this market. In this paper we investigate whether consumers of these small loans are less financially literate than the general population. We find that these consumers are less financially literate than the general population. They are also younger, more likely to be male, with less income and lower education. Mikil umræða hefur skapast á Íslandi um hin svo kölluðu smálánafyrirtæki. Annars vegar finnst mörgum að smálán bæti við flóru fjármálavara sem eru í boði fyrir neytendur. Hins vegar er hægt að líta svo á að smálán séu ekki annað en okurlánastarfssemi, enda vextir á þessum lánum afar háir. Þrátt fyrir að pólitísk umræða um smálán hafi verið nokkur hafa þau hins vegar verið nánast óskoðuð í fræðasamfélaginu. Í þessari grein skoðum við hvort neytendur smálána séu með verra fjármálalæsi en hinn almenni neytandi. Niðurstöðurnar gefa til kynna að neytendur smálána séu með verra fjármálalæsi en almennir neytendur. Þeir eru einnig yngri, líklegri til að vera karlkyns, með lægri tekjur og menntun. |
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