How Financial Innovation Helps the Poor
October 5th, 2010 | by linda smit |We have written before about the debate on whether financial innovation benefits or exploits the poor. (Even Russell Simmons weighed in.) Those who believe financial innovation necessarily hurts poor people may want to take a look at this perspective from Brazil, courtesy of NPR’s “Planet Money”:
I met a 19 year-old girl in a mall in São Paulo who had financed nearly every item she was wearing.
Célia de Resende paid for her red t-shirt in 3 monthly installments. Her sneakers were on a six-installment plan. She couldn’t remember how many more payments she owed on her black pants but she’s sure they were bought on credit.
This is the way Brazilians now shop. Consumer credit is a brand new concept and it’s wildly popular. Three Brazilian banks are among the world’s top 10 credit card issuers.
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Tags: Financial Innovation, Poor