Micro-credit and the Financialization of Low-income Households
This chapter deals with a specific aspect of the financialization of households worldwide: the extension of multiple forms of micro-credits to low-income populations. Governments played an important role in fostering the financialization of households worldwide. A distinctive feature of the financialization of households is its scope, which expanded its frontiers towards populations and regions that have been historically excluded from traditional circuits of finance, most notably from the banking system. Micro-credit has been pivotal to the financialization of households, alongside the extension of sub-prime mortgages, health insurances, retirement plans, investment devices and student loans, among others. In most advanced economies, retail banking has played a crucial role in financializing households through different investment vehicles and forms of credit. A different type of non-traditional actor driving the financialization of low-income households is payday lending. Microfinance institutions represent a critical actor in the expansion of micro-credit to the unbanked across the globe.