New Report Reinforces the Importance of Short-Term, Small-Dollar Loans

Southwest Public Policy Institute recently released a report titled “No Loan for You, Too!” which is the second installment of an investigation into the impact of price controls on consumer access to credit. The report reinforces the importance of short-term, small-dollar emergency loans in our society where many people are underbanked or unbanked.

The Institute showcases the difficulty of obtaining a short-term, small-dollar loan from a traditional credit source like a large bank. It also reveals that these loans, often used in emergencies, are not as easily accessible as they are advertised to be by supporters of interest rate caps.

Short-term, small-dollar loans are often used for necessary expenses like car payments, rent, or groceries. The loans are most useful when a consumer needs quick access to credit, and as the report shows, traditional credit sources do not offer accessible short-term options.

The Institute’s report serves as a reminder that non-traditional credit sources play an important role in society and serve underbanked and unbanked individuals in times of need.

Read the full report here.