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E-banking and consumer debt

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International-Journal-of-Electronic-Banking-E-Banking-And-Debt-Dimitrov-Cozzarin-accepted.pdf (349.74 KB)

Date

2021-01-01

Authors

Dimitrov, Stanko
Cozzarin, Brian Paul

Journal Title

Journal ISSN

Volume Title

Publisher

Inderscience

Abstract

Canadian consumers have a debt problem and averaged a nationwide debt-to-income ratio of 1.654 in 2016. Based on current research, it is unclear whether e-banking has a positive or negative impact on this ratio. This paper hypothesises that e-banking increases consumer access to capital, and - using Canadian nationwide survey data - discovers that e-banking enhances the consumer's ability to access debt, thus leading to an increase of the debt-to-income ratio by two dollars more for every dollar earned. We suspect that the higher willingness to pay, along with preferring to be rejected for a loan via a web portal, leads to customers using e-banking to request loans via an e-banking portal as opposed to going to the bank. Concluding, this paper recommends an increase in government monitoring of the relationship between e-banking and personal debt.

Description

Keywords

consumer debt, electronic banking, debt-to-income ratio, Canadian Financial Capability Survey

LC Keywords

Citation

URI

https://doi.org/10.1504/IJEBANK.2021.117373
 http://hdl.handle.net/10012/17412

Collections

Waterloo Research
Management Sciences