Abstract
ABSTRACT Purpose: Identify the relationship between the granting of payroll loans and macroeconomic aggregates, from 2004 to 2014, through an analysis of the influence of this type of credit on the aggregate economic activity in Brazil. Originality/gap/relevance/implications: Payroll loans are very representative in the Brazilian credit market, and the discussion on this topic is very extensive, because it is directly linked to the economic growth of a country. However, there is a gap in the literature on this subject, since most studies stress behavioral finances, or the legal aspects of contracts, and also because this type of credit is recent in the Brazilian economy. Key methodological aspects: This is quantitative approach performed through the estimation of the Vector Error Correction Model (VECM), which enabled the computation of impulse-response functions, the variance decomposition and the Granger causality test. Summary of key results: The results indicate that the granting of payroll loans causes an increase on macroeconomic aggregates in the short term, but over longer periods of time this increase tends to be eliminated. Key considerations/conclusions: The granting of payroll loans influences the behavior of the economic activity. However, despite the fact that its concession provides leverage in the short term, this growth is not sustainable in the long-term. In this scenario, there is exponential growth in household consumption over the past decade; however, the industry productivity and the investments did not follow this evolution. It is inferred from this that the current growth model generates expansion, but its effects are limited.
Highlights
The Brazilian financial market currently provides a diverse set of loans and financing to customers who wish to purchase goods or services, but do not have funds available in their personal budget
Originality/gap/relevance/implications: Payroll loans are very representative in the Brazilian credit market, and the discussion on this topic is very extensive, because it is directly linked to the economic growth of a country
Key methodological aspects: This is quantitative approach performed through the estimation of the Vector Error Correction Model (VECM), which enabled the computation of impulse-response functions, the variance decomposition and the Granger causality test
Summary
The Brazilian financial market currently provides a diverse set of loans and financing to customers who wish to purchase goods or services, but do not have funds available in their personal budget. It is noteworthy that the access to credit increases the purchasing power of population and, it fosters the economic activity This is one of the reasons why the government has, over the last few years, encouraged and eased credit lending, especially to the low-income population. Such changes in the credit policy began in the first term of former President Luís Inácio Lula da Silva (2003-2006), representing a significant change in the economic model that the country had been using for the last twenty years, regarding the granting of credit During this period, the concept of microcredit was disseminated, aiming to expand the supply of financial services to low-income populations (Zouain & Barone, 2008). Payroll loans, which were legally instituted by Law n. 10.820 (Brasil, 2003), emerged, authorizing the granting of loans with deductible payments from the payroll of employees covered by the Consolidation of Labor Law (CLT) and for the holders of retirement and pension benefits of the General Social Security System
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