O Efeito da Consignação em Folha nas Taxas de Juros dos Empréstimos Pessoais

Eduardo Rodrigues, Victorio Chu, Leonardo Alencar and Tony Takeda

No 108, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: This paper examines the impact of payroll debit loans - a Brazilian new modality of credit - on interest rates. The main characteristic of the new credit operation is the enforcement of a direct deduction of amortizations from personal payroll checks. Adapting a matching strategy proposed by Heckman, LaLonde and Smith (1999), and using a data sample that considers individuals that take out bank loans both with and without payroll deductions, we find that the new modality reduces loan interest rates significantly. Nevertheless, this reduction is half of what was expected using aggregate data. The paper also presents a sensitivity analysis for the case of sequential banking.

Date: 2006-06
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