SULCIS Working Papers,
Stockholm University, Linnaeus Center for Integration Studies - SULCIS

Abstract: This paper studies to what extent immigrants have less access to main- stream credit than their native counterparts. For this purpose I use a large, unique data set with a panel of Swedish pawnshop customers. The data al- low me to investigate to what extent pawnshop customers actively apply for mainstream bank credit and how successful they are by comparing credit ap- plications from immigrants and natives and the corresponding bank decisions. I do not …nd that immigrants have a di¤erent propensity to apply for main- stream bank credit. However, I do …nd that banks have a lower propensity to grant loans to immigrants from African descent compared to their Nordic-born counterparts. Robustness tests based on data from recent immigrants only suggest that the demand for credit varies with the duration of residence while di¤erences in loan-granting rates are enduring.

Keywords: Consumer credit; lending policy; alternative credit; pawn credit; immigrants

JEL-codes: C34; C35; D63; D81; G21

42 pages, January 24, 2012

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