That's a great question. I've studied administrative bank-level data on consumers who use these instalment loans. The instalment loans we had in our data were the old type of loans: You buy a couch and pay for it in instalments, or you buy a TV and pay for it in instalments. One of the findings we had was that, across all types of consumers, they're more likely to get a new loan as soon as the first one expires, whether they have the liquidity or not. What that tells us is that some people rely on these types of loans, even if they perhaps have the liquidity to not rely on these loans. For some reason, they agree to pay high interest to get these loans, and this high interest that they pay on these loans is not very productive. It's money they could use to do other things—maybe increase their education, maybe find a better job—but they're using it to consume.
