Historical Development of Payday Lending Market In The USA
The general level of financial literacy among the Americans is higher than in other global countries, which can be explained by a number of reasons. For example, both in Europe and in the United States, the population is a tax operator. People are used to counting their money and reporting to the state on their own.
Today, in the United States, the trend was found: with the development of the payday lending market, the level of offenses associated with robbery and theft decreased considerably.
Today, payday lending companies position themselves as representatives of the fintech industry and effectively apply innovative risk management methods, introduce cybersecurity and artificial intelligence technologies for processing big data. There are also special services describing the main ideas of bad credit loans MA or just online loans. Such resources contain loan terms and rates in a certain state, whether lenders issue loans for people with bad credit.
The blockchain is of great importance – more and more services will soon be organized in the form of a continuous sequential chain of blocks built according to certain rules.
The use of online financing and planning tools, according to financial experts, is one of the main drivers of economy development. And, despite the crisis phenomena characteristic of the country, such instruments are becoming more and more popular. In this respect, Americans choose the path of a developed country, where there are also those strata of the population in which payday loans are a demanded service.
According to statistical studies, in the United States, middle-aged women most often become borrowers, while the activities of US payday lenders are also focused on working with people from Latin America. In Europe, small loans are also in demand mainly among disadvantaged segments of the population, including former emigrants.
Gradually, the negative perception of payday lenders as unscrupulous companies and borrowers as representatives of disadvantaged segments of the population is becoming a thing of the past. Most likely, in the next few years, companies in the sector will completely cease to be associated with the image of modern usurers who profit from someone else’s grief, and the presence of attractive financial products in their line will help them attract even those clients who previously used exclusively the services of traditional banks.
How payday lenders appear on the financial market?
Microfinance has existed in various forms for centuries, and even in Asia, where informal lending and borrowing has been around for thousands of years. However, it is believed that the birth of “modern” microfinance took place in the mid-1970s in rural Bangladesh. There, in the midst of the famine, Dr. Muhammad Yunus, professor of economics at Chittagong University, became disenchanted with abstract economic theories that could not explain why so many poor people are starving in Bangladesh.
Inspired by the success of The Grameen Bank, there was a rapid growth in the number of new microfinance institutions around the world in the 1970s and 80s, many of which were founded by NGOs and funded through grants and subsidies from public and private sources. They demonstrated that the poor can be relied on to repay loans even without collateral, and therefore microfinance is a potentially viable business.
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