Effects of government legislation and regulation of payday loans in Canada: An economic analysis
LE3 .A278 2017
Bachelor of Arts
Almost everyone has unexpected personal financial difficulties at times. Low income or high credit risk individuals may be limited in their available options to smooth out and manage the impacts of these shocks. Many such households have limited access to traditional forms of credit, such as credit cards and lines of credit, or have maxed out these alternatives. The payday loans market is one option to mitigate the adverse effects of these shocks. However, the interest rates attached to these loans are significantly higher than traditional forms of lending. The costs of payday loans have raised questions about whether access to this form of credit is beneficial for consumers. I look to answer whether access to payday loans is welfare enhancing or detrimental within the Canadian market.
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