The effectiveness of Poland's new consumer credit requirements and their role in overcoming an information asymmetry between lenders and borrowers

The paper focuses information asymmetry suffered by the borrowers in consumer credit contracts. It analyses the impact of Poland's Consumer Credit Act of 2001 on the information asymmetry. Information available to borrowers has been enhanced under the new law. Banks publish their effective annual rates of charge, but some important information is still incomplete. The standardised information requirements did not narrow the range of loans. A negative relationship exists between the effective annual rate of charge and guarantees required by banks. However, the differentiation of effective rates for similar credits revealed deficiencies of understanding of information by the borrowers.