What are the consequences faced by unbanked consumers while coping with their credit exclusion

Abstract

This study explored the consequences of the strategies employed by low-income consumers to cope with their credit exclusion and how they feel when they experience such consequences. Data were collected through semi-structured interviews of 50 unbanked low-income consumers. The findings suggest that low-income consumers coping with their credit exclusion by obtaining loans from various informal sources sometimes enabled them to meet their various needs, which aroused feelings of achievement and belongingness in them. However, they were often unsuccessful in coping with their credit exclusion by utilising informal sources of finance, which aroused feelings of powerlessness in them. This study offers a number of avenues for future research in the realm of financial services.