Publication: Responsible Lending : Overview of Regulatory Tools
Date
2013-10
ISSN
Published
2013-10
Author(s)
Prouza, Tomáš
Abstract
This paper provides an overview of key
regulatory actions a government may implement to support
responsible lending. It covers a range of possible
interventions, including the provision of information,
developing consumers' ability to use that information,
formal requirements for responsible behavior of the lenders,
and regulatory limits for loans. Because the research on the
effectiveness of the responsible lending policies is
limited, the paper focuses on literature overview and
empirical evidence when available and uses case studies to
describe key policies. A regulator seeking to develop a
responsible lending framework must cover all areas of the
responsible lending regulatory and educational mix. No
single solution may be applied universally. The regulators
must ensure they understand the retail credit markets. The
paper identifies main policy options and areas for further
research. Better data on lending markets before and after
the rules are introduced and more detailed understanding of
consumer behavior helps in identifying effective regulatory
rules and supervisory actions that help ensure more
responsible lending while not limiting financial inclusion
and the growth of the credit market. Access to credit is
sometimes considered by national authorities a crucial
measure of financial inclusion. Low-income countries where
microfinance is a key contributor financial inclusion may
use similar measures.
Citation
“Prouza, Tomáš. 2013. Responsible Lending : Overview of Regulatory Tools. © World Bank, Washington, DC. http://hdl.handle.net/10986/16728 License: CC BY 3.0 IGO.”