Credit Thought Leadership Blog
Opportunties and Challenges of Running a Cash-Only Business
A benefit of running a cash-only business is lower transaction costs. There is no need to pay fees to rent or own credit card processing equipment, or for credit card…
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Building Trust in Credit Markets
Credit markets involve three main players: Borrowers, Savers, and Lenders. The role of financial intermediaries (banks, credit unions, community development financial institutions (CDFI), and non-bank financial companies) is to mobilize…
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Liquidity vs. Solvency Issues for Households
Households temporarily short of cash to cover their bills have a Liquidity issue and may need to briefly borrow money. Households that owe more than they own may face a…
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Identifying and Funding Climate-Friendly Investments
Community Development Financial Institutions (CDFIs) are in a unique position to help small businesses make climate-friendly investments. They can play a vital role in identifying and helping finance energy, water,…
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Impact Borrowing from Community Development Financial Institutions (CDFIs)
This post focuses on the demand for loanable funds in low-income and underserved communities. Impact borrowers typically have a specific social or environmental goal in mind and seek funding from…
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Household Credit and The Life-Cycle Income Hypothesis
Why and when do people need credit? Answers to these two questions can help us better understand household demand for loanable funds. Most spending on goods and services in the…
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Avoid Falling Into the Trap that led to the Global Financial Crisis
The collapse of the U.S. housing market which led to the great recession of 2008-9 could have been averted with better technology. The financial disruption from a collapse in housing…
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The Demand and Supply for Loanable Funds
Credit markets help align the demand and supply for loanable funds. They help match borrowers and lenders with different risk preferences and time horizons. Demand for loanable funds mainly comes…
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