El Mercado de Préstamos Prendarios en México: Quién lo usa, cuánto cuesta y qué tanta competencia hay.

Abstract

The objective of this paper is to describe the pawnshop market loans in Mexico. Having surveyed the biggest institutions that offer such loans in the country and using data from official sources, we calculate its relative cost and use probabilistic estimations to describe its customers. Further, we analyze where these establishments are and measure how much competition they face. Our results suggest that it is erroneous to think that these loans are only used by people that are financially excluded. Further, we show that for equivalent credit lines, the interest rates of these loans are quite similar to those charged by the banking sector. Finally, it is shown that there is competition in this market, but there is room for expansion. One of the limitations of our paper is that the database is a cross-section. This paper is the first to describe how this market works in Mexico. Its originality is also based on the collection of a new database. The importance of these loans and exhibiting the misperception we have about them are one of the main conclusions of this paper.