Living in Debt: Households Narratives in the Chilean Credit Retail-Led Expansion

This paper tries to address how Chilean households are dealing with the retail-led “democratisation” of credit that the neoliberal Chilean society has experienced from 15 years ago. Credit is seen here as a bundle of practices (banking credit cards, store cards, small loans, consumer credit, student loans, borrowing clubs, deferred payment shopping), and tied to other practices related, as household budgeting. These practices are set in everyday lives of households, rather than in consumption “fever” or in another accounts based on the idea of a sovereign consumer, or consumption as self-identity tool. The value of a practices perspective is investigate how practices can portray individual and household’s different knowledge, skills, meanings, valuation, and eventually agency, when they manage their domestic finances by using credit and deal with debt issues.

Credit expansion has had a broader impact in how socio-economic relationships have been negotiated and assessed in Chilean society. From this data emerge moral beliefs about when and how to use credit; survivor narratives to and thanks to credit; diverse perceptions about how society works and how the collective and the individual must be understood in society; personal and familiar narratives of social mobility with a changing and unprecedented view of poverty and middle class aspirations; a process of re-shaping of the subjective experience and social assessment of economic inequalities; accounts of opposed rationalities between debtors and lenders, and between credit users and financial education providers; and an ambivalent moral assessment about credit itself.

This paper relies on data collected in 2015 from 40 in-depth interviews with Chilean head of households from lower and lower-middle income groups, and also in statistical analysis which allows to deploy overall trends regarding debt, credit and microfinances. I pay special attention to the “post-industrial working class” and “micro-entrepreneurs”, the last groups entering the credit expansion.