Ironic that hire-purchase / instalment plans are designed to solve this problem but end up making it worse because they're usually only available at predatory rates, due to the huge risk of default.
Lenders and borrowers alike can’t rely on the borrower having a source of income at all.
For most people on a low income, it could be better to be on an even lower income if in exchange that income could be made more reliable. The instability and stress of precarious employment is worse than the low pay.
> they're usually only available at predatory rates, due to the huge risk of default.
This seems contradictory: if rates are sky-high, but they need to be that high to avoid the lenders losing money due to the huge risk of default, then they're not predatory.
Predatory on those who pay, not predatory on those who default. What's predatory on those who default is the pay-to-play system of credit bureaus.
Credit makes the modern economy run, but it churns out winners and losers. And some types of credit have more winners or more losers. At what point should society start banning such credit? Just once it crosses over into loan-sharking? Once it results in a net decrease of GDP? Have such analyses been done?
Lenders and borrowers alike can’t rely on the borrower having a source of income at all.
For most people on a low income, it could be better to be on an even lower income if in exchange that income could be made more reliable. The instability and stress of precarious employment is worse than the low pay.