PhD seminar – Julian Laynat

Event details :

Julian Laynat will present his paper entitled:

When credit rules change: the socio-economic effects of matching in the debt consolidation market in France

Abstract: In France, debt consolidation for over-indebted households is mainly channelled through specialist brokers, forming a market little known to both the general public and academic researchers. This intermediary arrangement is surprising, as it generates substantial costs for both borrowers and lenders. Yet, in 2022, outstanding debt financed via brokers (€4.5 billion) exceeded that handled by the Banque de France’s Over-indebtedness Commission (€4.2 billion), making it a mechanism as significant as the public system, but far less studied. This article examines how this brokered market organises the selection of households in over-indebtedness and who these households are. We employ a three-part analytical framework: matching theory (Simioni and Steiner, 2022), which accounts for the intermediation role of brokers between highly indebted households and specialist banks; the sociology of market intermediaries (Bailey, 1997), which sheds light on the organisational logic specific to these actors and explains the high cost of brokerage; and a socio-economic approach (Lazarus, 2022), which characterises the profiles of the households actually selected through this activity. The analysis is based on a three-year ethnographic study conducted within a brokerage firm, supplemented by an original quantitative dataset of 35,000 loan files processed between 2018 and 2024. These data are systematically compared with the profiles of households monitored by the Banque de France’s Over-indebtedness Commission and with indebted households identified by the French Banking Federation’s survey. Our results highlight a structural segmentation. The intermediated market selectively targets homeowner households with incomes above the third decile of the French income distribution, whilst the public scheme supports tenants with incomes below this same threshold. This duality stems from a selection of households deemed still creditworthy by market players (those with real estate assets that can be used as collateral or with incomes perceived as stable), leaving the public system to deal with profiles considered unprofitable. These findings call for a rethink of the regulation of this market. In the absence of specific oversight, the private debt consolidation scheme effectively performs a quasi-public function of managing over-indebtedness, whilst structurally excluding the most vulnerable households. This duality raises normative questions regarding the division of responsibilities between private actors and public institutions in addressing financial vulnerability.

His article will be discussed by Cécile Bourreau-Dubois (Professor, BETA, UL) and Marion Tosolini (PhD student, BETA, UL).