Consumer Credit in Comparative Perspective

The growth in consumer lending in the last decades relied on a particular type of formalization. This formalization uses statistical tools and information technology to handle a large number of loans. Yet this formalization is incomplete and various forms of consumer credit prosper shunning formalization and depending on social ties of various kind. Our paper focuses on consumer credit in Central and Eastern Europe where one finds a large variety of forms of credit addressing different social segments. We discuss three sectors, mass retail lending (including retail banking, purchase credit and mortgages), fringe lending (includes payday lending and usury) and collectivist solutions (rotating saving associations and saving coops) the way they generate demand and recruit clients, screen applicants, and deal with non-payment.  We will survey the various ways formalization and social ties are deployed in producing unique identities, classifying clients, generating reputation, and enacting justice.  We also discuss how these simultaneously reduce uncertainties and create new ones and affect social inequalities.