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A Business Analysis of the Payday Loan Industry

  • Chris Robinson
Chapter

Abstract

In this chapter, we focus on how the industry functions in Canada: industrial organization, revenues, costs, profitability, and the effects of regulation up to this date. We focus primarily on the storefront operations of the larger payday lending chains and internet payday lending. We present a financial analysis that shows the maximum fee allowed should be 15% of the principal of a loan, assuming that payday lending is allowed to continue in Canada. We consider as well the economics of both the installment loan—as a close alternative to the payday loan—and setting a limit on the loan size.

References

  1. Carlstrom, Steven (Affidavit sworn April 14, 2014). Application Record for Ontario Superior Court of Justice (Commercial List). Court File No. CV-14-10518-00CL [online]. http://cfcanada.fticonsulting.com/cashstorefinancial/docs/Application%20Record.pdf
  2. DFC Global Corp. 2013. Form 10-K for the Year Ended June 30, 2013. Berwyn, US: DFC Global Corp. https://www.sec.gov/Archives/edgar/data/1271625/000119312513352311/d590562d10k.htm
  3. ———. 2014. Form 10-Q, for the Nine Months Ended March 31, 2014. Berwyn, US: DFC Global Corp. https://www.sec.gov/Archives/edgar/data/1271625/000119312514195203/d724100d10q.htm
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  8. Robinson, Chris. 2016. An Economic Analysis of the Payday Loan Industry and Recommendations for Regulation in Manitoba. http://www.pubmanitoba.ca/v1/payday_loan_review2016/cac_5_tab_3_economic_analysis_c_robinson.pdf
  9. Robinson, C., and M. Schwartz. 2017. A Corporate Social Responsibility Analysis of Payday Lending. http://ssrn.com/abstract=3044087; forthcoming in Business and Society Review, 2018.
  10. The Washington State Department of Financial Institutions. 2014. 2014 Payday Lending Report. http://dfi.wa.gov/sites/default/files/reports/2014-payday-lending-report.pdf

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Chris Robinson
    • 1
  1. 1.Faculty of Liberal Arts and Professional Studies, School of Administrative StudiesYork UniversityTorontoCanada

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