PAWNSHOPS: ARE THEY REALLY A SOLUTION FOR THE VULNERABLE POPULATION?

Credit plays a significant role in the country´s economy, as much as the financial system, but what happens when a large part of the population has difficulties to access credit? Because of the former, the main aim of this essay is to analyze the viability of access to a credit modality through a pawnshop versus the alternative of a bank loan. For that, calculations of overdue amortizations were made. The results allow us to say that despite being more easily accessible for vulnerable population, the option of a pawn broking credit incurs in higher costs compared to a bank loan.