Abstract
Chapter 3 presents an analysis of commercial-based finance and credit schemes most notably payday lending and mobile banking. The chapter begins with an analysis of the motives, politics, and ethical considerations of commercial engagement, via credit and finance schemes, with vulnerable people. Commercial motivations for providing credit and finance are, by definition commercial, to generate profit, revenue, and/or market share. These motivations create challenges, from an ethical perspective, when asymmetric power (of banks as compared with vulnerable people) enables the bank to take advantage of the consumer. The chapter digs deeply, through results from research undertaken by the author and colleagues into payday lending and mobile banking. It finds that payday lending in the Global North, particularly Canada and the United States, can harm vulnerable people if the payday lenders rely on repeat borrowers. Mobile banking, particularly in Kenya and Bangladesh, has focused on money transfers, and the evidence is that, in this limited form, it can marginally assist vulnerable people. If mobile banking is linked with small loan schemes, then the outcome might change.
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