Irresponsible Lending? A Case Study of a U.K. Credit Industry Reform Initiative

Richards, Maria; Palmer, Paul; Bogdanova, Mariana

doi:10.1007/s10551-007-9520-3

Cited by 17 publications

(9 citation statements)

References 18 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Taking into consideration recent experiences with irresponsible lending leading to high levels of personal lending via credit cards (Richards et al 2008), which was further exacerbated by the subprime lending upheaval (Gilbert 2011), have all left their mark, and were part of the reasons for the emergence of alternative crowdlending channels. However, these problems were created by individuals who failed in their moral duties when making decisions that later led to significant harmful consequences from default and bankruptcy and all the way to suicide (Gilbert 2011;Richards et al 2008).…”

Section: Ethical Considerations In Crowdlendingmentioning

confidence: 99%

Lending Crowdfunding: Principles and Market Development

Ziegler

Shneor

2020

Advances in Crowdfunding

View full text Add to dashboard Cite

Crowdlending has emerged as the leading form of crowdfunding in terms of scope and scale. For lenders, it offers new investment opportunities, often offering better returns than some alternative investment channels, as well as opening to incorporate new small-scale investors that have not enjoyed such opportunities before. For borrowers, it offers new channels to access credit, often either offered at better terms or by including groups that have previously been marginalized and underserved by traditional credit service providers. In the current chapter we present the brief history of crowdlending, its diversity of models, the current state or the industry, as well as the underlying mechanisms and principles guiding platform operations including risk assessment and the matching of borrowers and lenders. The discussion is supported by a review of related research, while highlighting trajectories of industry development trends. The chapter concludes with suggestions for future research and insights for practitioners.

show abstract

Section: Ethical Considerations In Crowdlendingmentioning

confidence: 99%

Lending Crowdfunding: Principles and Market Development

Ziegler

Shneor

2020

Advances in Crowdfunding

View full text Add to dashboard Cite

show abstract

“…The report also found that details given by applicants were not verified in 9 out of 10 applications. All of this could leave the lender with an unclear picture of the customers' ability to service debt and result in lenders issuing credit limits, which are far beyond the cardholders' annual earnings or affordability (Richards et al, 2008). According to Cattermole (2004), this resulted in a drastic increase in bad debt being written off since 2000.…”

Section: Reckless Lendingmentioning

confidence: 99%

Post National Credit Act reckless lending in the South African banking industry

Migiro¹

2017

Public and Municipal Finance

View full text Add to dashboard Cite

One of the main aims of the National Credit Act (NCA) of 2005 in South Africa is to curtail rising consumer overindebtedness by encouraging credit providers to adopt responsible lending practices. This research study seeks to ascertain whether the NCA's responsible lending requirements have limited reckless lending by credit providers. Data are collected by a telephonic survey amongst debt counselors and in-depth interviews amongst bank employees. Descriptive statistics are used to analyze data from the descriptive survey, while data from in-depth interviews are analyzed using the thematic approach. Credit providers have divided opinions on whether the NCA limits reckless lending practices. Debt counselors claimed that credit providers are lending irresponsibly. By contrast, insights obtained from bank employees indicate compliance. However, both agree that borrowers are not borrowing responsibly. As a result, consumer education is required to educate consumers on both the benefits and risks of borrowing. It is also recommended that lenders be audited for compliance to the Credit act.

show abstract

“…(Debt collection agent 4) … cos we do have also clients that come in that for instance go into the bank for a £500 overdraft just to help them out and they are offered £5,000 loan so we do have a number of clients that state that the loans and credit cards were too easily available or it wasn't explained enough. (CAB advisor 1) It is our contention that this is not just a problematic side effect of a loosening of government control over credit through deregulation (Richards, Palmer, & Bogdanova, 2008), but a deliberate strategy through which to cultivate revolving debtors in a securitized industry where profits are contingent on a steady stream of persistent revolving debtors (Montgomerie, 2007). However, for organizations predicated on the establishment of revolving debts it forms a careful operational strategy.…”

Section: Parasitic Lending: Establishing the Relationship With The Hostmentioning

confidence: 99%

“…However, for organizations predicated on the establishment of revolving debts it forms a careful operational strategy. According to Richards et al (2008) this also means that people living in poverty in the UK pay in excess of £500 million a year in excessive interest charges.…”

Section: Parasitic Lending: Establishing the Relationship With The Hostmentioning

confidence: 99%

Parasitic encounters in debt: The UK mainstream credit industry

Walker

Hanna

Cunningham

et al. 2015

Theory & Psychology

View full text Add to dashboard Cite

Part of making visible the complex of institutions and practices that create and make knowable experiences of debt-related distress is to focus on the classed nature of these experiences. Contemporary bureaucracies of debt and distress need to be understood as reproducing divisions of status, power, and access to resources. The imposition of precarious forms of wage labour for those trapped at the bottom of what is an increasingly polarizing class structure has been shaped by very specific sets of financial practices where a deregulated personal debt industry has integrated subordinate classes into a web of financial relations through private pensions, consumer credit, and mortgages. This article draws upon empirical research with a range of stakeholders in the UK mainstream credit industry. We contend that the institutional logics, discourses, myths, and operational processes of the variety of agencies and actors in the UK mainstream credit sector have, through the radical changes of financial liberalization, evolved into a functional industry. This industry serves to enable, support, and enact social relational and economic practices that can best be understood through the metaphor of parasitism. This paper explores the specific organizational and relational practices that allow the financial exploitation of a beleaguered precariat.

show abstract

Irresponsible Lending? A Case Study of a U.K. Credit Industry Reform Initiative

Abstract: Banking, Borrowing, Credit, Ethics, Lending, Responsibility, Stakeholders,

Cited by 17 publications

References 18 publications

Lending Crowdfunding: Principles and Market Development

Lending Crowdfunding: Principles and Market Development

Post National Credit Act reckless lending in the South African banking industry

Parasitic encounters in debt: The UK mainstream credit industry

Contact Info

Product

Resources

About