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- The Consumer Credit Service after the Upper Limit Regulation of Interest Rates
The Consumer Credit Service after the Upper Limit Regulation of Interest Rates
Takao Iida
Sapporo University
“Money Lending Control Law” which passed the Diet on December 13th in 2006 reduced the upper limit for annual rate of interest to 20% from 29.2%.
We show ripple effects of the consumer credit service after this regulation on Hokkaido economy.
We calculate the economic effects for decrease of the loan balance (1)using 3.82% for the Hokkaido share rate of GDP in 2005 (fiscal year), (2)of annual interest rate more than 20% and (3)of Takefuji, Acom, Promise, Aiful and Sanyo Shinpan Finance.
(1) Decreasing the loan balance in 2005 was 36%.
For decrease of the last demand was $2,169.96 (million: 1 dollar =100 yen).
For decrease of the direct ripple effect was $2,656.69 (million).
For decrease of the indirect ripple effect was $460.91 (million).
The general ripple effect became $3,117.6 (million).
For decrease of the employment effect was 14,512.
(2) Decreasing the loan balance of annual interest rate more than 20% in 2005 was 22%.
For decrease of the last demand was $96.501 (million).
For decrease of the direct ripple effect was $118.147(million).
For decrease of the indirect ripple effect was $20.497 (million).
The general ripple effect became $138.644(million).
For decrease of the employment induction effect was 6,454 people.
(3) Takefuji, Acom, Promise, Aiful and Sanyo Shinpan Finance for decreasing the loan balance in 2005 was10.8%
For decrease of the last demand was $274.37 (million).
For decrease of the direct ripple effect was $335.91 (million).
For decrease of the indirect ripple effect was $58.28 (million).
The general ripple effect became $394.19 (million).
For decrease of the employment induction effect was 1,835.
When setting the population of Hokkaido in fiscal year 2005 to 5,630,000 people, the overall ripple effect will be decrease at about $554 per one person.
It was 1.6% for decrease of the ripple effect of Hokkaido’s GDP. The reason of the 3.82% of GDP supposed the share of the Hokkaido economy.
Key words: ripple effect, input-output, the consumer credit service
JEL Classification: E44: Macroeconomics and Monetary Economics, Money and Interest Rates, Financial Markets and the Macro economy, E47: Forecasting and Simulation, G81: Financial Economics, General Financial Markets, and R15: Economics and Input-Output Models; Other Methods.
