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Sustainable consumer lending: local communities, rationality, and economic policy

Sustainable consumer lending: local communities, rationality, and economic policy

Journal of Institutional studies, , Vol. 6 (no.3),
p. 67-82

As recent studies on issues related to sustainable local development in context of financial inclusion have shown, a research gap exists showing the lack of attention to retail product and service development aimed at harmonization of interests among all the parties involved in consumer lending system. Discussed in terms of financial inclusion, sustainable consumer lending is proposed to start with development and introduction of new, rational, consumer loans and credit practices. A sustainable consumer lending model is suggested as involving, in institutional perspective, local communities as its essential element, rational consumer loan being considered as a feature of the model. Regional and municipal economic policies aimed at alignment of the interests of borrowers and lenders, along with sustainable territorial development priorities, are proposed to induce community-oriented product development in retail banking. Small mono-industrial towns of the Russian Federation are viewed as the testing areas for regional or municipal authorities to support practical implementation and replication of such sustainable practices.

Keywords: consumer lending; sustainable development; financial inclusion; local communities; rationality; institutions; regional and municipal economic policy


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