Informations et ressources scientifiques
sur le développement des zones arides et semi-arides

Accueil du site → Projets de développement → Projets de recherche pour le Développement → 2004 → Small Consumer Loans for the Working Poor in South Africa

Innovations for Poverty Action (IPA) 2004

Small Consumer Loans for the Working Poor in South Africa

Loans Poor

Innovations for Poverty Action

Titre : Small Consumer Loans for the Working Poor in South Africa

Région /Pays : Afrique du Sud

Date : 2004-2006

Contexte
Poverty in South Africa is widespread ; approximately 57 percent of individuals were living below the poverty line in 2001.1 Numerous impoverished areas could potentially benefit from increased access to credit to help smooth household consumption. However, the poor typically lack the credit rating and/or collateral needed to borrow from traditional institutions such as commercial banks. Moneylenders dominate the informal lending market and typically charge 30-100 percent interest per month. The cooperating Lender has operated for over 20 years as one of the largest, most profitable microlenders in South Africa. It offers small loans at high interest over short periods of time, frequently to the working poor who have no collateral and must make payments on a fixed schedule.

Présentation
This evaluation examined the direct impact of small consumer loans on profitability, credit access, investment, and measures of well-being such as household consumption and physical and mental health. The sample consisted of 787 rejected loan applicants deemed potentially creditworthy by the Lender. Applicants were eligible if they had been rejected under the Lender’s normal underwriting criteria but not found to be egregiously uncreditworthy by a loan officer. The motivation for increasing credit supply for a pool of marginal applicants is twofold. First, it focuses on those who stand to benefit most from expanding access to credit, namely the unbanked poor. Second, it provides the Lender with information about the expected profitability of changing its selection process to examine marginally creditworthy individuals more closely. A random portion of the eligible applicants were then assigned a “second look” by lender staff who were encouraged but not required to approve a randomly selected portion of these applicants for loans. Ultimately branches made loans available to 53 percent of the previously rejected applicants who had been randomly assigned to be re-examined. Accepted applicants were offered an interest rate, loan size, and maturity per the Lender’s standard underwriting criteria. Nearly all received the standard contract for first-time borrowers : a 4-month maturity at 200 percent APR. Applicants in the treatment and comparison groups were surveyed six to twelve months after applying for a loan to examine behavior and outcomes that might be affected by access to credit, including mental health outcomes.

Echantillon : 787 members of the working poor who apply for a consumer loan

Partenaires  : University of California, Berkeley - University of California, San Francisco - Northwestern University - Dartmouth College

Innovation for Poverty Action (IPA)

Page publiée le 23 août 2018