A Grounded-Theory Approach to Understanding Regulatory Enforcement, Credit Access, on Debt-Traps

Abstract

In recent studies, researchers agree that there is a substantial gap in the field of financial management as it relates to debt traps. There is very little empirical evidence of the phenomena of debt traps or the complex process that leads to this. Addressing the lack of empirical research on this phenomenon can help improve both theory and practice in improving anti-poverty measures. The research aims to: (1) examine the cause of debt traps in Trinidad and Tobago and makes recommendations for avenues leading citizens out of debt traps; (2) develop a theory to explain the cause of consumer debt traps in Trinidad and Tobago.  This study can help provide policymakers with a tool to help craft policy prescriptions that can effectively address predatory formal and informal moneylending, borrower education, debt traps and, generally, aid the business community with developing affordable credit policies that would help the vulnerable population avoid debt traps. This was done utilizing a qualitative research design. The interviews were done face to face via snowballing with 45 participants, QDA miner software was used for the data analysis.  The significant findings of this research show that the Administration of the Process of Lending led to debt traps.