Consumer credit and risk in Chile. Towards an economic sociology of finance
There is little doubt; the expansion of consumer credit has been one of the most wide ranging transformations in the last 20 years in Chile. Recent data shows that between 1991 and 2007 the number of bank issued credit cards increased from 890.481 to 5.347.649; which, in terms of overdraft implied, an expansion from Ch$64.824 millions to Ch$1.183.238 (Barros 2009). Perhaps even more impressive is the introduction and of new types of credit issuers, mainly retail store chains, and others like Indemnity Funds (Morales & Yañez 2006). In 2007 there were 14 different non-bank credit cards, with more than UF115millions in transactions in a year (Barros 2009). In this context, very relevant actors in the Chilean economy (such as supermarkets chains; department stores, and even pharmacies) are increasingly oriented to finance. It is possible to argue that Chilean economy has lived it own ‘financialization’ but it has a very specific and domestic character: consumer credit.
These transformations have not gone unnoticed for sociologists in Chile. However, these works have been mainly developed from the point of view of the consumers (Ariztia 2002, 2009, Barros 2003, Mendez 2008, Stillerman 2004). In terms of intellectual traditions, it can be said that previous work have studied the expansion of consumer credit from the point of view of sociology of consumption, where this research will do it from the point of view of economic sociology. In this sense, this work follows one of the main movements in current economic sociology (and related disciplines), namely the increasing attention to elements traditionally considered as ‘technical’ in markets, and in particular finance. In this context, the form elements such as credit, risk and uncertainty are studied have been importantly transformed. Currently, social scientists interested in these issues are opening new forms of facing essential questions today, as the connection between knowledge and markets (Callon 2007, Mackenzie & Millo 2003), the consequences of quantification in current finance (Guseva & Rona-Tas 2001, Poon 2010), and how the expansion of credit to sub-prime users has transformed how social categories and social inclusion are produced today (Thrift & Leyshon 1999). At the same time, these works are part of a wider transformation within social science, which is widening its range of interests to actors and materials that were not previously part of its scope (Pinch & Swedberg 2008, Knorr Cetina & Bruegger 2002). In this context the current research must be situated.
This research assumes, then, that a social study of credit and more generally finance is not just about how consumers approach and deal with technical objects, like credit, but also a form of opening the black box of the world of finance. However, the world of consumer credit is far to be simple. The type of relevant actors in this industry is not just commercial banks and retail stores, because the development of this industry goes together with the proliferation of many new actors such as: institutions specialized in gathering consumer information like DICOM; debt bond rating agencies; banks that buy securitized debt, and more generally new regulation and an amazing amount of data. At the same time, consumer credit, as many other sectors of today economy, is not purely local. In fact, Chilean firms had expanded their businesses to neighboring countries, many international firms are present in Chile, and consumer credit is connected with bonds and other financial goods whose exchange is not limited to a specific country. The current research aims at facing this complexity.
Specifically, this work will reconstruct the heterogeneous networks of actors, tools and multiple institutions involved in the consumer credit world today; and in a more general sense, how these institutions classify and organize their actual and potential users. In this context, the main outcome of this work will be descriptive, but at the same time, it aims to give a new form of understanding and accounting of a central part in our current economy that is between many other things, central in defining the potential range of consumer expenditure for most of the population. In this sense, analyzing consumer credit systems is central in the context of wider attempt to understand the specific characteristics of Chilean market society started in previous works (Ossandon 2009).