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Consumer Lending as Impediment and Financial Source for the Sustainable Development of the Depressed Mono-Towns (Research Proposal)

Consumer Lending as Impediment and Financial Source for the Sustainable Development of the Depressed Mono-Towns (Research Proposal)

Journal of Economic Regulation, , Vol. 5 (no. 1),
p. 116-127

Importance and relevance of research aimed at assessing financial position of households in depressed areas on the basis of comparative analyses of loan portfolios, budgets and balances of assets, liabilities and equity capitals of households are asserted. Institutional and infrastructural barriers of consumer loans impeding local social-economic development are revealed. The coordinative role of the regional and municipal authorities in reducing information asymmetry and transaction costs of interactions between the actors of the lending system; increasing loyalty and trust of mono-town residents to public authorities; creation of innovative purpose loan products; improving consumer loans sustainability on the whole is defined. As a part of the future research, a number of hypotheses related to supporting the sustainable consumer lending and improve households ’ wellbeing in the depressed mono-towns are introduced in context of interdependence between sustainable development of depressed areas and federal, regional and municipal policies. A series of crosscountry comparisons of overindebtedness and lending purposes in terms of their influence on local economic development in different countries and interregional disparities, is proposed as the section of further study.


Keywords: lending to individuals; depressed area; sustainable consumer loan; development finance; local economic development; economic policy; institutional design; economic inequality; consumption patterns; patterns of borrowing behavior; information asymmetry; transaction costs

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