This must make it so much more difficult for the the poor to ever escape their condition. I suppose it's common for an entire family tree to just tell lenders to take a hike, but then their only way to borrow money is through the black market, and there must be vanishingly few legitimate business opportunities were a person would feel confident that they could make enough money to pay loan-shark rates.
I'm sure this policy is detrimental to class mobility and entrepreneurship, but I'd be interested to know if it even promotes a more profitable loan market than in countries with legal bankruptcy.
Banks here are breaking their own profit record for several years in a row, while the economy is almost in recession (last year 0.9% in growth, inflation currently 6.7%, also credit card rate is around 450% year.
Last time I had to take a loan with the bank (instead of temporary negative balance) I paid 100% on a 6 month loan.
The negative balance pays 10%/mo of your current balance (thus if you never repays it, you get a rate of 300% year)
EDIT: "what do you think?" is a real question, I don't have data on other countries to know how much loan banks profit there.
I'm sure this policy is detrimental to class mobility and entrepreneurship, but I'd be interested to know if it even promotes a more profitable loan market than in countries with legal bankruptcy.