Impact of payroll loans on indebtedness of the elderly in Brazil

16 December 2021

A recent case study conducted by the Fair Finance Guide Brazil, which is coordinated by the Idec (Brazilian Institute of Consumer Protection) has found that abusive offers and lack of regulation of payroll loans promotes 'income capture' and deepens indebtedness of the elderly, especially those in receipt of social security payments. The study also looks at the limitations of legislation to combat harassment in the provision of credit and preserve the financial health of the elderly people.

This study analyzes the offer of payroll-deductible loans in Brazil and its relationship with the indebtedness of retired consumers under the general system of Brazilian social security. The work can be divided into five main parts: (i) Scenario and evolution of the payroll-deductible loan offer in Brazil by FI; (ii) Analysis of Brazilian regulations related to the granting of payroll-deductible loans; (iii) Analysis of Mexican regulations related to the granting of payroll-deductible loans; (iv) A real case related to the indebtedness of a elderly person with payroll-deductible loans; and (v) Responses from institutions.

Read the report here