Consumer Loans, Heterogeneous Interest Rates, and Inequality

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Mar 2023
Using the Brazilian administrative credit registry data with the universe of all consumer loans originated by banks in the country from 2013 to 2019, we document high borrowing interest rates, which vary systematically with individuals characteristics. In particular, even after controlling for several observable individual attributes (such as income, occupation, and default probabilities, low-income), individuals pay higher interest rates than high-income borrowers.