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Table 10 Effect of different policies on the arrears risk (in %) of borrowers, all households and for the consumer debt portfolios

From: Adverse selection, loan access and default behavior in the Chilean consumer debt market

Counterfactual Default definition

Borrower risk

All households risk

Portfolio risk

Arrears past year

Arrears (months)

Arrears past year

Arrears (months)

Arrears past year

Arrears (months)

1

3

1

3

1

3

Baseline

24.1

18.2

4.8

14.3

9.7

2.5

16.7

9.6

2.5

Pension law of 2022

24.0

18.1

4.8

14.3

9.6

2.5

16.6

9.5

2.5

Income test

24.0

18.2

4.8

14.1

9.5

2.4

16.5

9.4

2.4

Financial literacy

22.6

17.0

4.4

11.6

7.8

2.0

14.0

7.9

2.0

  1. All households’ risk takes into account that households with no debts have zero risk. Portfolio risk takes into account the size of the loans held by each borrower