The Brazilian Payroll Lending Experiment

Christiano A. Coelho, Joao De Mello and Bruno Funchal ()
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Christiano A. Coelho: IBMEC-RJ

The Review of Economics and Statistics, 2012, vol. 94, issue 4, 925-934

Abstract: In December 2003, the Brazilian Congress passed a law that led to a natural personal lending experiment. The law allows banks to offer loans with repayment through automatic payroll deduction, which, in effect, turns future income into collateral. We estimate the impact of the new law using auto loans as a control group. The law has caused a reduction in interest rates and an increase in the volume of personal credit. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: payroll; loans; credit markets; collateral; difference-in-differences; Brazil (search for similar items in EconPapers)
JEL-codes: C33 D01 E44 G21 K00 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (11)

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Working Paper: The Brazilian Payroll Lending Experiment (2010)
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