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Secured Loans In Mexico And Its Effects, Prestamos Prendarios En Mexico Y Sus Efectos

Author

Listed:
  • Rufina Georgina Hernandez Contreras
  • Rosa Maria Medina Hernandez
  • Rosa Maria Solis Salazar

Abstract

This research examines the process, regulations, pros and cons of secured loans (collateral loan or pawnshop loans) which have proliferated in Mexico in recent years. The study focuses on analyzing financial aspects and the interest rate. Specifically, we examine the cost it represents to the consumer and the economic returns for companies engaged in this business. Two pawnshops that operate nationwide were analyzed. The legal, social and financial aspect of secured loans providers was verified, as well as the financial impact on its consumers. Moreover, a comparison between secured loans and bank loans was performed, as an alternative for consumers and in that manner acquire a reference of the options provided by the Mexican Financial System, through the commercial banking. The study seeks to answer: What is the history of the pawnshops? How much to pawn an item? What are the benefits brought by this type of financing to the Mexican economy? Why are these businesses proliferating?

Suggested Citation

  • Rufina Georgina Hernandez Contreras & Rosa Maria Medina Hernandez & Rosa Maria Solis Salazar, 2015. "Secured Loans In Mexico And Its Effects, Prestamos Prendarios En Mexico Y Sus Efectos," Revista Global de Negocios, The Institute for Business and Finance Research, vol. 3(5), pages 47-58.
    • Handle: RePEc:ibf:rgnego:v:3:y:2015:i:5:p:47-58
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    More about this item

    Keywords

    Secured Loan; Interest Rate; Interest Cost; Pledged Good; Pawnshop; Pledger;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law

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