Short-Term, Small-Dollar Lending: Policy Problems and Implications

Category Archives: central cash

Short-Term, Small-Dollar Lending: Policy Problems and Implications Affordability is a problem surrounding lending that is small-dollar. The expense connected with small-dollar loans seem to be greater when compared with longer-term, larger-dollar loans. Additionally, borrowers may get into financial obligation traps. A financial obligation trap takes place when borrowers whom could be not able to repay their loans reborrow (roll over) into brand brand new loans, incurring extra fees, instead of make progress toward paying .